Power firms have started cancelling deals with Chinese equipment manufacturers
Many Indian private developers have cancelled the orders with Chinese companies after making down payment and moving out to other suppliers – local and international. They are worried about the performance of the (Chinese) equipment. About 11000MW equipment has moved out of China by Indian buyers.
Indian power firms such as Reliance-Anil Dhirubhai Ambani Group's Reliance Power Ltd, Lanco Infratech Ltd and Adani Power Ltd had placed orders for equipment to generate 26,000MW with Chinese firms, largely because of the inability of local manufacturers to meet growing demand.
Chinese equipment is also relatively inexpensive. Suppliers such as Shanghai Electric Group Co. Ltd, DongFang Electric Corp. and Harbin Power Equipment Co. Ltd. can supply fast
The Central Electricity Authority, or CEA, India's apex power sector planning body, had earlier raised questions about the quality of the Chinese equipment.
BHEL was in talks with more Indian firms, and was expecting an additional order of 5,000MW of power generation equipment.
Media questions emailed to the China offices of all three Chinese companies named above, the Indian representatives of Shanghai Electric and DongFang Electric Corp., and the Chinese embassy in New Delhi were not answered. Spokespersons of Reliance and Lanco – both Indian companies - also did not respond. An Adani Power spokesperson said the company had placed orders for power projects aggregating to about 8,000MW to Chinese suppliers.
Recently the Chinese prices have increased, with the Yuan becoming stronger. All Chinese suppliers have increased costs because some (new) labour laws have been introduced. There is also an escalation in steel prices.
India has a power generation capacity of 147,000MW and plans to add 78,577MW by 2012.
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