New Delhi: In an attempt to meet the country’s burgeoning electricity demand and placate China, the Indian government plans to double the number of work visas for skilled Chinese workers. The move follows complaints that a shortage of Chinese workers was stalling the construction of power plants.
The government is concerned because India could fall around 4,000MW short of the 13,000MW of power generation capacity it has targeted adding during 2009-10, mainly because of visa problems faced by Chinese workers associated with electricity projects.
The estimated shortfall is enough to meet the demands of a city the size of Delhi.
The number of work visas will be increased to 40 per electricity generation project, from 20, at the behest of the power ministry.
The issue was recently discussed at a meeting called by cabinet secretary K.M. Chandrashekhar.
“Wherever Chinese are building their plants, they are getting affected. We have referred the problem to the Union ministry of power and they are likely to come up with some solution,” said Rakesh Nath, chairman of the Central Electricity Authority, India’s apex power sector planning body.
The decision is also being viewed as an attempt to defuse tension between China and India. Several Indian power project developers have placed orders with Chinese firms, largely on account of the inability of local manufacturers to meet growing demand for equipment. Chinese equipment is relatively inexpensive and immediately available.
“In view of the power projects that have ordered equipment from Chinese suppliers getting delayed, the government is thinking about doubling the number of work visas for Chinese skilled workers from 20 people per unit to 40,” said H.S. Brahma, Union power secretary.
India has long sought to protect local power equipment makers from their Chinese rivals.
Some Chinese firms have complained of bias against them arising from security issues which prevents them from winning significant contracts here.
Chinese workers find it increasingly difficult to secure visas.
Brahma had earlier told Mint that his ministry had received representations from Indian firms to limit the presence of Chinese players in the sector.
Indian power generating firms have placed orders for equipment to generate 26,000MW with Chinese firms such as Shanghai Electric Group Co. Ltd, Dongfang Electric Corp. and Harbin Power Equipment Co. Ltd.
These companies are also sitting on so-called letters of intent from Indian firms for equipment to the tune of 25,000MW.
China exported $31.33 billion worth of goods to India in 2008-09.
“The visa criteria should be comprehensive, which has to stand the test of time,” said Shubhranshu Patnaik, an executive director at consultancy firm PricewaterhouseCoopers. Around “26,000MW has already been placed with the Chinese. Given that situation, you will have to find a way how they (Chinese) will implement it. You can’t wish them away. They will have to bring in their people to implement these projects.”
Bharatsinh Solanki, Union minister of state for power, informed the Rajya Sabha on 24 November that due to the visa policy, the new power plants being constructed by Chinese companies will get delayed.
Some of the projects getting affected because of the limited number of visas allowed to Chinese workers include those of Anil Ambani-owned Reliance-Anil Dhirubhai Ambani Group, Lanco Infratech Ltd and JSW Energy Ltd.
Questions emailed to the spokespersons of the three companies and the Indian representatives of Shanghai Electric and Dongfang Electric Corp. on Friday remained unanswered at the time of filing this story.
India has already revised the power generation targets for the 11th Plan from 87,577MW to 62,000MW.
Progress so far has been limited, with only 9,300MW of generation capacity added in 2007-08 against a target of 12,000MW.
Only 3,500MW was added against the target of 11,000MW in 2008-09.