The Hindu Business Line : NTPC mulls tying up with low-cost Chinese vendors

New Delhi April 10 NTPC Ltd is open to sourcing equipment from Chinese vendors in an effort to keep project costs down for its new power stations. The Rs 30,000-crore utility is also looking at the possibility of tying-up with Chinese suppliers for the 4,000-MW Ultra Mega projects in the pipeline.

NTPC, which has largely been relying on Bharat Heavy Electricals Ltd (BHEL) for equipment supply, was priced out in the bidding for the initial Ultra Mega power project, mainly with competing bidders having tied-up with low-cost Chinese vendors.

"We are open to talking with Chinese suppliers. It is just a question of getting equipment at the cheapest cost, so whoever bids for our project and is ready to supply at the lowest cost would be selected," a senior NTPC official said.

Price-competitive bids

He said that the Chinese equipment suppliers were welcome to bid for NTPC's new projects. The company is also open to talking with low-cost suppliers for ensuring its bids for the Ultra Mega projects are competitive, he added.

The company is already sourcing equipment from Korea's Doosan Heavy Engineering and Power Machines of Russia for its power projects based on the new super-critical parameters. In the first couple of Ultra Mega power projects, several bidders went in for tie-ups with overseas vendors for critical components to keep bids price-competitive.

For the Sasan project, the winning bidder Lanco Infratech had a tie-up with China's Dong Fang Electric Corporation for power equipment supply and had quoted a benchmark tariff of Rs 1.19 per unit, way below NTPC's quote of Rs 2.12 per unit.

According to industry sources, Chinese equipment makers may have an edge over the local players in terms of pricing and delivery lead-time in the light of overcapacity in the Chinese domestic market. Chinais said to have huge idle capacity of as much as 50,000 MW with power equipment manufacturers, though its equipment quality is largely untested in the Indian market. Shanghai Electric and Dong Fang Electric Corporation are among Chinese firms said to be adopting aggressive entry strategies into the Indian market, which has been dominated by players such as Siemens and Alstom, besides market leader BHEL.

NTPC, which has an installed capacity of 27,404 MW at present, has announced a multi-pronged growth strategy to achieve 75,000 MW plus installed capacity by 2017.

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