The issue of visa for Chinese workers is likely to dominate the agenda when Chinese Premier Wen Jiabao meets prime minister Manmohan Singh on his forthcoming, three-day visit to this country, which is slated to begin on Wednesday. Power equipment supplied by Chinese vendors are 15-20% cheaper compared to equipment supplied by domestic manufacturers Bhel and L&T. Chinese suppliers like Dong Fang and Shanghai Electric Corporation have contracts worth over 1.5 lakh crore in hands to supply equipment to power projects in India.
But because of the ministry of home affairs? recent guidelines that restrict issuance of employment visas, Chinese contractors are unable to deploy required manpower at various power projects being handled by them. The result is that most of these projects are running late.
Chinese vendors are implementing about 25% of the 78,700 mw capacity addition envisaged by the Indian government under the 11 th Five-year plan. Meanwhile, the government has envisaged capacity addition of 100 gw during the forthcoming 12 th plan. Of this, orders for equipment supply to projects worth 62,550 mw have already placed on contractors. Chinese suppliers have bagged contracts worth 15,430 mw. India?s record on capacity addition in the power sector has been dismal in the past decade. For example, the country could commission only half of the capacity addition envisaged for implementation during the previous 10th plan.
Inadequate availability of power equipment was a key reason cited by the Union power ministry to explain the huge shortfall in the capacity addition target.
India is unlikely to meet its capacity target for the current 11 th plan either. The government had envisaged adding 78,700 mw capacity. Against that, only 28,572 mw was added by the end of October this year.
The Planning Commission has already revised capacity addition target to 62,000 mw during its recent mid-term appraisal.
If visa issue for Chinese workers is not resolved in time, power projects being handled by Chinese contractors could well slip the current plan, raising possible capacity addition shortfall for the 11th plan, say industry watchers.
