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October 23, 2013
Beijing, China

MoU between Ministry of Power, Government of the Republic of India and The National Energy Administration, Government of the People’s Republic of China on setting up Chinese Power Equipment Service Centres in India

The Ministry of Power of the Government of the Republic of India and the National Energy Administration of the Government of the People’s Republic of China (hereinafter referred to as "the Parties”)

Desirous of further strengthening and deepening cooperation in the energy sector under the India-China Strategic Economic Dialogue (hereinafter referred to as the SED) mechanism,

Noting that energy cooperation and the proposal for setting up Chinese Power Equipment Service Centres (hereinafter referred to as "PESCs”) in India was discussed at the SED Working Group Meeting on Energy that took place in Beijing on September 26, 2013.

Acknowledging that India has become a strategic market for Chinese power equipment manufacturers and that 18 GW of thermal power projects were commissioned under India’s 11th Five Year plan using Chinese-manufactured equipment and about 40 GW of power projects are currently under construction using Chinese-made equipment.

1. Sharing the common understanding that setting up of the PESCs in India would enable render timely service to plant owners, help optimize maintenance & operation costs, and eliminate risks where possible from outage maintenance cycles.

Affirming the mutual benefit of enhanced cooperation in the area of energy cooperation under the laws and regulations of both India and China, and within the framework of cooperative, complimentary, equal, and win-win principles.

Have reached the following understanding:-

1.1 The Parties recognized that large number of Chinese-made power equipment has been installed/or currently being installed in India

1.2 The Parties acknowledge that requisite provision for timely and unhindered availability of spares and service support is important and necessary for reliable and economic plant operation over the operating life and to improve plant utilization rates. It has been agreed that the National Energy Administration of the People’s Republic of China would actively encourage Chinese equipment manufacturers who have supplied power equipment including power generating equipment to India companies to set up PESCs in India. The form and scope of service will be decided by equipment supplier and project owner on market principles.

1.3 This Memorandum of Understanding is intended to define general ways of cooperation between the Parties to establish the said PESCs in India

Article 2: Cooperation Programme

2.1 The Parties agreed for setting up of Power Equipment Service Centres (PESCs) in India by the Chinese suppliers/manufacturers themselves or through some suitable mechanism. The service centres would be adequately provided with equipment, personnel, spares and other facilities so as to enable them to provide all requisite spars and services support within India.

2.2 The PESCs will be set up in India on market principles. The costs and terms of servicing power equipment will be decided between the PESCs and the end user.

2.3 Parties agree to establish Sub-group comprising of related Government agencies and companies to facilitate as well as review the progress of setting up of the PESCs.

2.4 The companies will make themselves fully conversant with the relevant rules/regulations/statutes/approvals and processes being applicable for setting up of such PESCs in India.

2.5 The PESCs would be directly responsible for provision of requisite services to the Indian power generating companies on mutually acceptable terms and conditions (between the PESCs and the Indian power generating companies) and in accordance with applicable Indian laws/rules/statutes and this MoU shall not in any-way confer any special or preferential status/treatment to the PESCs.

Article 3: Settlement of Disputes

3.1 Any dispute arising between the parties in regard to interpretation and application of the present Memorandum shall be settled through friendly consultation by the Parties.

Article 4: Entry into force, duration and Termination

4.1 The MoU takes effect on the date of its signature by both Parties and will remain in force for five (5) years, if neither side gives notice to amend or terminate this Memorandum at least two months prior to the expiry date.

4.2 The PESCs may enter into contracts with Indian project owner for provision of related spares and services on such terms and conditions as may be agreeable between them. The contracts entered into may exceed the term of this Memorandum.

4.3 The Memorandum may also be amended by mutual consent.