POWER CONTRACTS TO CHINESE COS POSE SECURITY THREAT: INDUSTRY
CONTRACTS HAVE BEEN AWARDED IN 18 CITIES SINCE 2011 THROUGH COMPETITIVE BIDDING
Domestic manufacturers have slammed the decision to award contracts to Chinese companies for installation of supervisory control and data acquisition systems for better power distribution and management in 18 cities, saying this can lead to foreign control over a sector which is critical to the country's growth.
The contracts have been awarded by seven cities in Tamil Nadu, five each in Rajasthan and Madhya Pradesh, and one in Puducherry since 2011 through competitive bidding.
This could pose a threat to national security as well, domestic players said, since electric distribution systems carry power to pipelines, water systems, telecommunications and other critical infrastructure, besides serving critical government and military facilities.
“The Chinese seem to have an unstated policy of not awarding any sensitive con tract involving national security to Indian companies. On the other hand, we have not been cautious in awarding contracts involving critical components in critical sectors,” said Indian Electrical & Electronics Manufacturers' Association (IEEMA) director general Sunil Misra. “For example, a lot of electricity generation equipment which has come from Chinese companies is not performing satisfactorily in many cases.”
IEEMA has made a representation to the National Security Advisor, cabinet secretary and the ministries of commerce and power. Distribution-level cyber attacks that disrupt power supply to such facilities can have important economic and security consequences, IEEMA said. Such attacks can lead to control of the distribution system from remote areas, exchange of critical data and a greater threat to the national grid, it said.
China's share in imports of electrical equipment into India grew to nearly 40% in 2013-14 from 15.26% in 2005-06. Over this period, imports of electrical equipment into the country increased 19.73% to `58,354 crore.
The cheaper imports have also affected the local transmission and distribution equipment manufacturing industry, which is operating at less than 70% capacity has not seen any growth in capital expenditure over the past few years.
The Indian electrical equipment industry -comprising generation equipment (boilers, turbines, generators) and transmission and distribution and allied equipment (transformers, cables, transmission lines, switchgear and energy metres) -was valued at `1.36 lakh crore in 2014-15. The generation equipment accounts for about 15% of the total industry while the transmission equipment sector forms the bulk of the sector.