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Chinese labourers banned from Indian power sector

Such unskilled and semi-skilled workers can be found in India,says govt...

The government has banned Chinese labourers from working in the Indian power sector. What remains to be seen is whether Chinese power players will continue to bid on parts of larger projects if the hundreds of labourers required per project are banned from entering India,or if the Centre and much of the private sector will pitch in.

“Those unskilled and semi-skilled workers can be found in India,” home minister P Chidambaram told The Indian Express. “We are no longer approving visas for temporary workers.”

States benefiting from Chinese power projects hope obligations for existing contracts are upheld by the home ministry and the external affairs ministry. Similarly,Chinese companies are growing increasingly frustrated with the “flip-flopping” of Indian policy after Chinese companies were “welcomed to bid in an open market.”

“You can’t change the rules of the game after the fact,” said a high-ranking official with Dong Fang Electronics. Dong Fang is currently providing parts to seven of the 20 power projects awarded to Chinese companies in India through 2012.

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Haryana’s principal secretary Madhusudhan Prasad is unsure whether Chinese power players will be comfortable handing over their parts to Indian labourers; “naturally,they have confidence in their own workers. The price might go up if they wish to engage Indian workers,” he said. Haryana has hosted Chinese workers in Yamunanagar and Hissar,where boilers and turbines are being installed in thermal power plants of 600 and 1,200 mega watts,respectively. The turnkey projects were won by Reliance Power which turned to Shanghai Electric to serve as the engineering,procurement and contractor (EPC),according to Prasad. A Reliance Power spokesman insisted that the company strictly uses its own labour for EPC.

Based on recent policy actions,it appears that Indian power players are content with keeping growth and development of the power sector in-house. Coupled with Chidambaram’s announcement to The Indian Express, the Union cabinet has mandated that supplies for the next 11 supercritical power plants must come from Indian-based companies. Nine have already been awarded to NTPC.

The two policies could effectively shut the open market which India had hoped would bring an influx of international competition to its power sector. Instead,few players have entered the game aside from the Chinese companies which were awarded 20,000 MW of power projects during the 11th five-year-plan,compared to the 65,000 mw now estimated for installation by 2012.


Chinese power companies Shanghai Power and Dongfang Electronics have argued that their workers are better prepared to install boilers and turbines manufactured in their plants in China. “I don’t think that’s a good enough reason to issue a visa,” Chidambaram said.

First published on: 26-09-2009 at 03:06 IST
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