Equipment orders with Chinese cos to stay
October 27th, 2010

New Delhi: The government will not terminate power equipment orders placed with Chinese firms during the 11th Five Year Plan (2007-2012).

“Whatever equipment orders have been placed, under the 11th Five Year Plan, it will not be terminated…Chinese companies are welcome in the sector,” power minister Sushil Kumar Shinde said on Tuesday commenting on whether there is a bias against the Chinese products in the power sector.

A panel headed by planning commission member Arun Maira had submitted its report to the Cabinet on levying import duty of 10-14% on import of power equipment from China and other countries to create a level playing field for domestic players. The ministry of heavy industries and public enterprises has supported the panel’s recommendations.

The proposed levy would help Indian manufacturing companies like Bhel and L&T. However, it would adversely affect private sector power companies dependent on Chinese equipment like Reliance Power, Tata Power, Essar Power, AES India, Adani who are against the imposition of import duty. Power minister’s assurance can bring relief to these private players who have invested in Chinese power equipment.

Recently power ministry had suggested to levy the import duty but couldn’t find support from the finance ministry. Power minister said, “We have not received any intimation from the finance ministry over the matter”.

In a separate session, Power Finance Corporation limited Satnam Singh said company will be raising $ 260 million through External commercial borrowing in next two -three months.

Power Finance Corporation (PFC) recently received an infrastructure finance companies (IFCs) status from the Reserve Bank of India. This enables PFC to raise External Commercial Borrowings (ECB) for on-lending to infrastructure projects in India.

Source – Financial Express

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