CLP wins first power project in India

New Delhi: China Light Power (CLP), a Hong Kong-based power utility, has become the first Chinese company to win a competitive bid for the 1,320-Mw Jhajjar thermal power project in Haryana.

The Chinese company won the first domestic project in India by quoting an aggressive price of Rs 2.996 per Kwh, comparable with the Rs 2.33 per Kwh quoted by Reliance Power, belonging to the Anil Dhirubhai Ambani Group (ADAG), for the Krishnapatnam ultra mega power project (UMPP) in Andhra Pradesh.

This is despite the fact that the Krishnapatnam project is on the coast, making transportation of coal easier and cheaper. Also, the project's size, 4,000 Mw, was thrice than that of the project won by CLP.

'Chinese companies leverage cost competitiveness. They are able to bid lower prices due to cheaper equipment,' said an industry expert belonging to an accounting and advisory firm. Equipment accounts for about 80 per cent cost of a power plant, he added.

This comes at a time when the government is planning to add about 78,500 Mw capacity in the current Plan period (2007-2012). A greater chunk of the orders, accounting for about 16,000 Mw or 22 per cent of the target, will go to Chinese power companies.

Many low-cost Chinese companies, including Dongfang Electric, Shanghai Electric and CMEC, are active in the power equipment sector and are striking alliances with Indian power utilities and manufacturers to tap the growing domestic market.

At present, state-owned Bharat Heavy Electricals Ltd (BHEL) owns half the power equipment market in India, followed by the BHEL-Siemens consortium, which has 11 per cent market share. Chinese companies, along with leading private equipment manufacturers like Larsen & Toubro (L&T), make up the rest of the market.

CLP will supply 90 per cent of the power generated to Haryana for 25 years. The state government has promised land, water and coal linkages in due course of time.

Apart from India, the 100-year-old company generates more than 13,000 Mw in Hong Kong, Australia, China, Thailand, Taiwan, India and other countries by utilising different sources of energy, including nuclear, thermal, gas and wind.