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Last week, the Central Electricity Authority sent out an advisory to state and central power utilities to insert a clause in tenders that would require power equipment suppliers to set up manufacturing facilities in India.

Sources say that this advisory is aimed at ensuring all the contracts do not go to the low-cost Chinese suppliers. The Centre is also worried about the performance of Chinese machinery. In that regard, the advisory says that utilities “may like to incorporate” the condition of “phased manufacturing facilities in bids to be invited in the next three years (till October 2012)”.

Over 60,000 MW of fresh capacity has been planned for the 11th Plan (2007-12) down from the initial plan of 78,000 MW.

While firms such as Larsen & Toubro and BHEL are in the process of expanding “indigenous manufacturing”, sources say it could take over three years. This could delay power projects that is scheduled for, say, 2013.

The power ministry is learnt to have altered its view and now is of the opinion that such a clause can be incorporated from the 12th Plan onwards.

Shouldn’t the government be more concerned about increasing power supply in the country rather than ‘indigenous manufacturing’?

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