India, China in Pact to Set Up Power Equipment Service Centers in India

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Researched by Industrial Info Resources India (Delhi, India)--India and China have entered into a landmark agreement to set up Service Centers for Chinese Power Equipment supplied to India. The pact is seen as a major development for enhancing co-operation between the two nations in the power sector as India's reliance is constantly increasing on Chinese equipment to meet its capacity addition goals. A Memorandum of Understanding (MoU), to this effect, has been signed on Wednesday (October 23, 2013) by India's Ministry of Power and China's National Energy Administration (CNEA).

Thermal Power Projects with a total capacity close to 18 Gigawatt (GW) were commissioned in India during the country's 11th Five Year Plan Period (2007-2012) using China-made equipment, while another 40 GWs of such power projects are currently under construction.

Chinese equipment vendors do not have a manufacturing base in India, though its major power equipment manufacturers are keen to set up manufacturing facilities and are seeking softer visa and import norms. With a good number of plants being operational with Chinese equipment the need has been felt for setting up Power Equipment Service Centers (PESCs) for China-made machineries, as there were many instances where equipment had to be sent to China for repair and the power plants remained shut for months due to lack of service network in India.

A proposal for setting up such service centers was tabled at the Strategic Economic Dialogue (SED) Working Group Meeting on Energy, which was held on September 26, 2013 in Beijing, the MoU between the two countries is signed during Indian Prime Minister Manmohan Singh's ongoing official visit to China. The Union Cabinet of India had last week approved a proposal allowing Chinese power equipment manufacturers to set up service centers in India.

"The service centers would be adequately provided with equipment, personnel, spares and other facilities so as to enable them to provide all requisite spars and services support within India," said a media release from the Indian Prime Minister's office.

As per the terms of the MoU, the PESCs will be set up in India on market principles and costs and terms of servicing power equipment will be decided between the PESCs and the end-user. The two parties have also agreed to establish a sub-group comprising of allied Government agencies and companies to facilitate and review the progress of establishment of the PSECs.

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