Power ware poses risk of sabotage
Deploying imported intelligent electrical equipment and electronic components in the power sector runs a risk of sabotage in electrical grids. The industry is well-equipped to reduce its imports and avoid such risks. It only needs the government to tweak its bidding norms to favour quality products, and not the cheapest ones.
Discoms, gencos and transcos in the power sector are the main consumers of electrical equipment and industrial electronics. The industry imports $10.24 billion, or Rs 71,000 crore, worth equipment, including turbines, generators, transformers, switch gears, capacitors and energy meters. Of this, 30 per cent comes from China. The share of China in the imports had gone up from 15 per cent in 2005-06 to 45 per cent in 2011-12 and has gradually come down to 30 per cent.
About 11 to 12 per cent of these Chinese imports meant for power projects come under the concessional duty of 5 per cent. India had introduced this concessional duty in 1986 when it did not have the capacity to produce them locally. "Now we can produce all those products locally, but the concessional duty has not been scrapped. Our manufacturing units are now running with a capacity utilisation of 30 to 40 per cent. We can increase utilisation rates if imports come down," said Sudeep Sarkar, director, Indian Electrical and Electronics Manufactur-ers''
Association (Ieema).
Further, some of the intelligent electronics products imported from countries like China can be remotely controlled. Discoms in some of the states that have deployed supervisory control and data acquisition (SCADA) systems use such imported intelligent electronic equipment. "Importing such products poses a risk of sabotage. It is possible for the supplier to blackout these states. The risk of malware and spyware embedded equipment also cannot be dismissed. The Central Electricity Authority had submitted a report on such cyber security threats to the government last year," he said.
The industry says that it is confident of manufacturing all the finished products on its own. It only needs to import some raw materials. "We have the technology to produce quality products. Our products are being exported to developed markets like the US, UK and Europe. However, the sector still ends up importing cheaper products due to the bidding norms of the government," he added.
The auctions favouring the lowest bidder makes the quality supplier lose business due to the cutthroat price competition. "China can produce them cheap as the government there provides incentives on infrastructure amenities. A change in auction norms in favour of quality bidder will make companies look at parameters like life time cost, performance and cost overrun," Sarkar said.