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Home News Power Sector News Impose 15% duty on imported power equipment - BHEL

Impose 15% duty on imported power equipment - BHEL

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BHELIn a bid to counter the increasing competition from Chinese players, state-owned Bharat Heavy Electricals requested  the finance ministry to impose a 15% duty on imported power  equipments,  chairman K Ravi Kumar said. “If the Indian government does not impose a duty on Chinese companies, BHEL would be wiped off after five years,” Mr Kumar warned. Chinese equipment makers such as Dongfang Electric, Shanghai Electric and Harbin Power Equipment have already supplied equipment to the West Bengal government, Anil Ambani’s Reliance Energy and Anil Agarwal’s Sterlite.

“Post Olympics, China has free power generating equipment capacity, which they would dump on India as the demand is high here. We have asked the finance ministry to impose 15% import duty on all imported power generating equipment, which currently attract zero duty,” Mr Kumar said. The finance ministry is studying the proposal.

The Chinese power equipment companies have bagged orders worth Rs 18,000 crore from India in the past few years. Indian companies placed orders with the Chinese companies as their power equipment is cheaper than Bhel’s.

The domestic power equipment company is unable to cater to the rising domestic demand due to its own capacity constraints. It is increasing capacity to produce equipment for generating 15,000 mw power by December 2009 and 20,000 mw by 2011.

In order to counter the Chinese competition and economic slowdown, Bhel plans to seek less advance while booking orders from its customers. “Instead of 10%, we are now asking for an advance of 5% at the time of order booking,” he said.

Bhel has an order book position of Rs 27,000 crore and expects to close seven power projects of 3,500 mw in four months. But the company’s growth will be lower this year compared to 41% last year.

An industry analyst said that, even at peak capacity, Bhel is unable to meet the local demand. “By seeking to keep the foreigners out, Bhel is just increasing the cost of power projects. This will ultimately result in consumers paying higher electricity tariffs,” he pointed out.

Courtsey- Economic Times

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