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| Power min opposes DIPP move allowing import of used parts Tue, 15 Feb 2011 22:42:53 GMT |
| NEW DELHI: The power ministry has opposed government moves to formulate a policy on import of second-hand power equipment , arguing that this would help China and USA dump low-quality gear into the country. Responding to a proposal from the Department of Industrial Policy and Promotion (DIPP), the power ministry also said that allowing import of used power equipment may lead to lower efficiency and sought a ban on such exports. Power ministry's stand is likely to hit small and medium scale and captive industries to hit the most, while major power developers including Lanco Infratech and NTPC said they do not prefer used goods. "We have told DIPP that this move would hurt our plans to absorb energy-efficient supercritical technology. In all probabilities, equipment not suitable for Indian conditions and standards would fail to operate. Imposing a ban rather than regulating second hand imports for power projects is a better idea," a power ministry official said. DIPP is the nodal government body for idustrial policy and foreign investment regime. Currently, there is no difference in treatment of imports of new and used capital equipment and second hand capital goods can be imported into the country without any restrictions. With the policy, DIPP seeks to regulate import of second hand capital goods into the country. According to DIPP, some of the sub sectors like textile machinery, machine tools, earthmoving equipment, and printing machinery have been hit hard by such imports. But instead of recommending an outright ban on such imports, the DIPP wants to impose strict conditions on imports of second hand equipment. Countries such as China, Australia, and Thailand have policies for importing second hand machinery, it has said defending the moves to have policy. The department has proposed to restrict import of capital goods in use for more than five years. A threshold limit in terms of cost, insurance and freight value of imports is likely to be specified and an effective monitoring mechanism is proposed to be developed to monitor imports of such capital goods. It hopes to discourage the import of poor quality equipment into the country through these rules. But the power ministry has argued that implementing these rules will be difficult in the case of already used power equipment. For instance, ascertaining exact efficiency parameters of machinery manufactured for other countries would be difficult. "Evaluating second-hand equipment not made in India is not possible as their value would depend upon initial design, life expectancy, and operation and maintenance." An official in Lanco Infratech said the company does not use second hand machinery. "Financial lenders to projects would also not approve of the same." An NTPC director said small industries and captive power producers often look for used machinery. A senior official at Bharat Heavy Electricals Ltd said equipment for Indian power stations is designed to suit domestic weather conditions. "The project is planned keeping high temperature in mind. The equipment should also be accommodative of domestic coal that has high ash content and grid frequency variations." |
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