Illegal power plants to be cracked down
(Agencies)
Updated: 2005-02-15 01:23

China will issue an action plan for cracking down on illegal power plants within two months, brokerage house Merrill Lynch said Monday in a research report.

An engineer directs the assembly of a generator at a power plant in Liaocheng, Shangdong Province, East China, December 10, 2005. [newsphoto/file]

Local governments have been building the illegal plants to ease severe power shortages caused by the country's booming economy.

Beijing opposes the plants because they don't fit its long-term energy plan and are usually environmentally unfriendly, coal-fired facilities. But little has been done about the problem so far.

"Two separate Chinese electric power sources confirmed to us that the central government authorities would soon publicize a plan to prepare to take some 'real' action," the Merrill Lynch report said. It didn't identify the sources.

The report said the plan will focus on illegal plants that are being built or planned without central authorities' explicit approval.

Merrill Lynch estimates China's unauthorized power capacity at 80-140 gigawatts, from plants mainly located in the coastal area.

The report said the action plan includes curtailing bank loans to the plants and possibly shutting them down completely.

"Timing for the issuance of the expected circular and execution of the plan is said to be between one to two months," the report said.

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