In a major push to the domestic power gear makers like BHEL and L&T, the government on Tuesday said all the upcoming 4,000 MW ultra mega power projects will source equipment from Indian equipment makers.
“Good thing is that the UMPPs (ultra mega power projects) will source equipment from Indian companies and that itself will be a step in the right direction to ensure that, rather than relying on imports, the power equipment produced in the country are consumed (by power companies) within the country,” Heavy Industries and Public Enterprises Minister Praful Patel said.
He was talking to reporters on the sidelines of a CII function in New Delhi.
The new Standard Bidding Documents (SDBs) were approved by an Empowered Group of Ministers headed by Defence Minister A. K. Antony, last week.
“The EGoM has considered our request very positively and I am sure it will be notified soon...” Mr. Patel said.
The EGoM cleared the proposal of tweaking the SDBs for implementing the new Case-II thermal power plants including the 4,000 MW UMPPs. The suggestions of the EGoM will be incorporated and further approved by an Inter Ministerial Group (IMG).
At present, Reliance Power, which is executing three UMPPs — Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) — is sourcing equipment from Chinese company Shanghai Electric Corp.
Further, Mr. Patel said his ministry has also sought an additional levy of 5 per cent on imported power-gear to protect domestic power-equipment players.
“We will continue to push for additional duties for imported power equipment. We have already made a beginning by having a 5 per cent import duty on imported equipment. We wish to have more...”
In July last year, the government had slapped 21 per cent import duty on power equipment. The Cabinet, last year, had approved 5 per cent basic customs duty, 12 per cent counterveiling duty and 4 per cent special additional duty on the import of power gear.
The move comes against the backdrop of local power equipment makers, including state-run BHEL, facing tough market conditions due to overall economic sluggishness and cheaper imports, mainly from China.
In July, Mr. Patel had written to Finance Minister P Chidambaram seeking higher import duty on power gear.