CII Naoroji Godrej Centre of Manufacturing Excellence




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Central Electricity Authority wants government-funded power projects to use domestic parts

23 May 2016

Government-funded power projects will have to use locally-made equipment and material procured through domestic competitive bidding, the Central Electricity Authority (CEA) has said.

Government-funded power projects will have to use locally-made equipment and material procured through domestic competitive bidding, the Central Electricity Authority (CEA) has said. The move might trigger litigations from foreign players on grounds of bias towards domestic players, some experts said.

In a letter to the heads of central and state-owned power generation, transmission and distribution companies last week, the power sector regulator has asked them to abide by the new domestic procurement norm.

"Domestic manufacturers have invested heavily in technology transfer from their principals or have developed technology indigenous for creating and expanding manufacturing capacities, manpower and skill development to meet the growing demand," the CEA letter said.

"Under-utilisation of existing manufacturing facility has become a matter of concern because of large-scale penetration of foreign equipment and material in the power sector." According to industry executives, Chinese companies have been winning most power equipment and material supply tenders, but product quality has become a concern and some projects are stuck due to it. Chinese companies have also started eating into the solar power projects pie, they said.


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