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India power gear makers face order crunch on strict bidding norms
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Saturday, 27 Oct 2012

The Economic Times reported that engineering firms and power gear makers are facing an order crunch as power project developers place stringent bidding conditions.

Engineering firms said that most private power generators have kept their projects on hold and only state run power companies are inviting bids but with riders that restrict many companies from bidding for the contracts.

Turnkey contractors and equipment makers said that only big firms like Bharat Heavy Electricals Ltd and Larsen & Toubro are repeatedly winning contracts while others are idle. However, state owned power companies say these conditions are necessary since power equipment market in India is at a nascent stage.

In their recent tenders state run companies like NTPC and Rajasthan Rajya Vidyut Utpadan Nigam Ltd have asked domestic companies to produce several responsibility certificates from foreign partners.

The turkey contract tenders have barred engineering, procurement and construction firms from participating unless they form JV with equipment manufacturers. The contracts allow only India made equipment and ask foreign technology providers like Alstom to bid with just one Indian company even if it has tie-ups with several local players.

Industry insiders said that currently, there are only about five turnkey and equipment contracts being tendered by Indian Farmers Fertilizer Cooperative, Neyveli Lignite Corp and state utilities of Maharasthra, Rajasthan and Gujarat. Private power companies have kept their expansion plans on hold given the uncertainty about fuel supply.

Mr S Unnikrishnan MD of Thermax India said that such conditions put tremendous pressure on equipment manufacturers when the market is not in best of its forms. I expect power companies to be more mature and practical in the tendering process.

Source - The Economic Times


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