The finance ministry has shot down a proposal to levy 20% duty on imported power equipment, saying domestic capacity was far short of demand and the proposed move have made electricity more costly.
Local equipment suppliers, led by BHEL, are struggling to meet the huge demand from power firms, which are building new capacity of about 80,000 MW in the Eleventh Plan that ends in 2012. BHEL would meet 55% of the demand , while the rest is being imported, mainly from China, which would meet 20% of Indian demand. Domestic capacity is likely to catch up with demand only by 2013-14 but demand would rise further as the government expects another 100,000 MW capacity to be added in the next five-year plan.
Besides BHEL, private sector engineering major L&T has set up a 4000 MW main power equipment (boiler, turbine and generator) manufacturing facility at Hazira in Gujarat in collaboration with Japan’s Mitsubishi Heavy Electricals . Toshiba and JSW Group combine ; Ansaldo Caldaie SpA of Italy and GB Engineering Enterprises Pvt Ltd; and Alstom -Bharat Forge combine have also proposed setting up main plant equipment facilities in the country to bridge the deficit situation currently.
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