Date:03/05/2008 URL: http://www.thehindu.com/2008/05/03/stories/2008050359691800.htm

Business

PM’s step to protect power equipment PSUs

Special Correspondent

Preference should be given to state-run firms for orders

NEW DELHI: Amid the chorus of liberalisation and free economy, the United Progressive Alliance (UPA) Government at the Centre has taken a ‘major step’ to ‘protect’ the interests of domestic power equipment companies from “invasion of imported equipment” asking all power generation companies to place their bulk orders with state-run PSUs.

The initiative has come from none other than the Prime Minister, Manmohan Singh, who has issued directions that state-run companies, including Bharat Heavy Electricals Limited (BHEL), should be given preference in placement of bulk orders for power equipment supply. The Prime Minister has also directed the Central Electricity Authority (CEA) that it should explore the possibility of setting up 660 MW and 800 MW units with State governments, including Maharashtra and Gujarat. Leading generation company National Thermal Power Corporation (NTPC) has also been asked to pursue with them the possibility of setting up units through joint venture. Such State project bench marked to price discovery through International Competitive Bidding (ICB) by NTPC or any central utility may also be allowed to avail mega power project concessions.

The Prime Minister had issued orders that for super critical technology induction, preference should be given to BHEL to ensure that it is not pitted against “cheap imported power equipment” that has entered the Indian harbours during the recent times. “The credit for this should go to the Prime Minister as he has taken a big initiative to protect the interests of PSUs,” Minister of State for Power, Jairam Ramesh, said.

UMPPs

Similarly, the Prime Minister has also directed that the Empowered Group of Ministers on Ultra Mega Power Projects (UMPPs) should ensure that future UMPPs apart from being super critical units should also ensure they source the equipment from supplies that provide upfront commitment for progressive indigenisation of technology. “When such procurement of power is done through tariff-based competitive bidding, the benefits of custom duty, excise duty and deemed export under the UMPP policy should be available to such players. This would expand the domestic manufacturing base in the power sector,” the Prime Minister’s order states.