Chinese firms seek to buy Indian power, EPC assets
NEW DELHI : Attracted by India’s infrastructure development programme, state-run Chinese firms, including China Harbour Engineering Co. Ltd and China Datang Corp (CDC), are looking to buy stakes in Indian companies in the engineering, procurement, construction (EPC) and power generation space, respectively to drive their business, two people aware of the Chinese firms’ interest said.
While CDC, one of China’s largest power generation utility, has been attracted by India’s stressed power projects, another government-owned firm, China Southern Power Grid, plans to bid for power transmission projects, said one of the two people cited above.
India’s plan to invest ₹3.96 lakh crore in the current financial year to fund its new integrated infrastructure plans comprising roads, railways, waterways and civil aviation is attracting interest from foreign firms, including Chinese companies.
Local companies have, however, been raising concerns about the participation of Chinese firms in India’s infrastructure projects given their strategic importance. There have been instances in the past when India stopped giving clearances to telecom equipment imported from China over security concerns.
“China Harbour Engineering is looking for acquisition in the EPC space across sectors. CDC has also become interested in acquiring stressed power projects,” said the first person aware of the company’s India strategy, requesting anonymity. CDC’s interest comes at a time when the government is trying to address the problem of stressed assets in the power sector. JM Financial Research, in a March 8 note, wrote that its 2016 study of stressed power assets had concluded that of the total 28 gigawatts (GW) generating capacity in question, assets accounting for 14GW were at high risk.
The second person, who also didn’t wish to be identified, said that Chinese firms have been trying to explore opportunities in India to drive growth.
China Harbour Engineering is a unit of China Communications Construction Co. Ltd. Chinese firms’ interest stems from ambitious plans such as Sagarmala and Bharatmala. While the total road length to be developed as expressways under Bharatmala will be 51,000km, the Sagarmala programme envisages construction of new ports to harness the country’s 7,517km coastline and setting up as many as 142 cargo terminals at major ports.
“China Southern Power Grid has been looking to bid for power transmission projects in India,” said the first person.
Queries emailed to the Chinese embassy in New Delhi, China Communications Construction Co., China Datang and China Southern Power Grid remained unanswered.