PTI reported that Reliance Power said that slapping import duty on foreign equipment will push electricity tariffs higher.

Reliance Power CEO Mr JP Chalasani told PTI that "Imposing duty on imported equipment would push up the overall tariffs.”

Mr Chalasani said that "The power sector is stressed due to various factors. There is pressure on tariffs. It would not be right to impose duty on imported power equipment.”

He noted that "Tariff is a function of the market.”

Reliance Power's existing 1,200 MW Rosa plant in Uttar Pradesh is using equipment from China and the company has also placed orders with Chinese entities for many of its upcoming projects. Rosa plant currently has 900 MW of capacity commissioned and the remaining 300 MW is expected to be ready by March, 2012.

The government is planning to impose a 14% duty on imported power equipment, especially from China, as part of efforts to provide a level playing field for domestic gear-makers such as BHEL and L&T. A committee headed by Planning Commission Member Mr Arun Maira had also suggested the imposition of a 10% customs levy in addition to a 4% special additional duty on imported power equipment.

The Association of Power Producers a grouping of 14 entities, including Reliance Power, TATA and Essar had recently opposed the proposal to impose duty on imported gear.

(Sourced from PTI)