Supplying India's power plants

On the desk of MV Rabade, the chief representative for Indian power developer Adani Power Ltd in China, there are photographs of the company's power generation projects in India. Interestingly, all the workers featured in the photos are Chinese.

Currently, about 1,000 Chinese workers are working at different Adani power plants in India, Rabade said.

The company, which belongs to Indian tycoon Gautam Adani, is one of the first privately owned companies in India to enter the power sector.

So far, all main power equipment supplies, including boilers, turbines and generators, have been imported from China, Rabade said.

Chinese companies are building $7 billion of power plant equipment for Adani Power and other customers in India, according to a recent report from the Financial Times.

Chinese manufacturers are processing orders from India for boilers, turbines and generators with a total capacity of 20,000 megawatts, the Financial Times reported, citing sources with Lloyd's Register.

Trade opportunities

There's huge demand from India and a huge supply available in China, creating enormous opportunities for trade, Swaminathan Krishnaswamy, a Lloyd's Register vice-president for India Chemicals and Power and Sino-India business development, said in the report.

The main Chinese suppliers to India include Shanghai Electric, Dongfang Electric and Harbin Electric.

Major Indian customers include industrial groups Reliance, Essar, KSK Industries, JSW Energy, Jindal Steel & Power and Adani Power.

In the past three years, Adani Power has signed agreements with its Chinese partners to import 14 sets of power generating units with a combined capacity of 7,920 megawatts, Rabade said.

The latest order was placed in July, when the company signed a letter of intent with Sichuan Machinery & Equipment Import and Export Co Ltd, or SCMEC, for two 660-megawatt units.

Rabade said other Chinese companies contributing to the 7,920 megawatts of capacity include the country's three main suppliers: Shanghai Electric, Dongfang Electric and Harbin Electric.

"We have chosen Chinese-made products for two primary reasons: short delivery times and cheap price," Rabade said.

Time and price

Compared with their Western counterparts, Chinese companies can deliver their products in much less time, and their price is always about 30 percent lower, Rabade said.

Adani Power in 2007 opened its first representative office in Beijing.

This year the company opened its second office in Chengdu, the capital of Sichuan province.

Rabade said he was optimistic about future deals with Chinese companies.

"India will see rapid development of its power industry in the next few years. It is a promising market," he said.

The Indian government's target for the five years ending 2012 is to build power plants with a capacity totaling 78,000 megawatts.

But because of the limited production capacity domestically, undoubtedly there will be more imports from China in the future.

Rabade said there are challenges in dealing with Chinese companies.

"Chinese companies always use their own standards, but we are using Western standards, so sometimes it is hard for us to understand theirs," he said.

Adani Power is focusing on thermal power, but the company also is considering the development of hydropower plants in India.

Rabade said the company is now in talks with firms in China to import hydropower equipment.

Many domestic companies have looked to the Indian market for business expansion.

SCMEC Chairman Yao Yunning told China Business Weekly that India accounts for nearly half of SCMEC's overseas markets.

This year the company has seen its first 330-megawatt power unit supplied to Adani Power begin operations.

Yao said SCMEC has sent more than 400 workers to India for power projects.

(China Daily 08/10/2009 page4)