Contractor of smart metering project in J&K drops Chinese supplier on REC arm’s directives

This follows an order, issued by Ministry of Power on July 2, 2020, mandating prior permission of GoI for any import of equipment/ components/parts from “prior reference” countries along with testing of the same in certified and designated laboratories.
Contractor of smart metering project in J&K drops Chinese supplier on REC arm’s directives
New Delhi 

A contractor (Techno Electric & Engineering Co Ltd) of a smart metering project in Jammu and Kashmir has dropped its Chinese supplier from the list of sub-contractors after the state-owned REC Power Distribution Corp Ltd (RECPDCL), an arm of Rural Electrification Corp (REC), asked it to do so. RECPDCL had in September 2019 awarded a project for installation of 1.155 lakh smart meters in Jammu & Kashmir to Techno Electric & Engineering Co Ltd.

On July 2, 2020, Ministry of Power, Government of India (GoI) issued an order regarding vulnerabilities in the power supply system and network which may arise due to possible cyber-attacks through malware/ trojans etc embedded in the imported equipment. The order mandated prior permission of Government of India for any import of equipment/ components/parts from “prior reference” countries along with testing of the same in certified and designated laboratories. 

According to RECPDCL press release, after this order was issued, all new/ongoing contracts are being reviewed and as part of that review one of the sub-contractors of the J&K smart metering project, which though a company registered in India and having manufacturing facilities in India, was found to be a subsidiary of a Chinese company. The said sub-contractor was directed to be removed from the project since the continuation of the subcontractor would have led to the requirements of taking prior permission and testing of every equipment supplied thus leading to unacceptable delays in execution.

Smart metering project has mainly four components - meter, RF communication, MDM and system integrator. The successful bidder (Techno Electric & Engineering) including all its sub-contractors for different components, viz meter, RF communication, MDM and system integration, are companies registered in India.

The principal contractor has now informed RECPDCL that it has removed the said sub-contractor. 

Recently, the Congress party had alleged that despite the government claim of Chinese companies being barred from working in India, the meter installation project in Jammu and Kashmir was being indirectly handled by the Chinese company (which the Congress party had identified as Dongfang Electric India, the Indian unit of the Chinese power equipment maker).

“It may also be noted that the award of this contract was finalized about a year ago and therefore linking it to a subsequent development is wrong and smacks of bias. The company is committed to follow the law of the land in letter and spirit,” emphasised RECPDCL in the release.

As part of measures to restrict imports from China, the Government of India recently amended the General Financial Rules 2017 to enable imposition of restrictions on bidders from neighbouring countries which share a land border with India on grounds of defence of India, or matters directly or indirectly related thereto including national security. As per the Order any bidder from such countries sharing a land border with India will be eligible to bid in any procurement whether of goods, services (including consultancy services and non-consultancy services) or works (including turnkey projects) only if the bidder is registered with the competent authority. The competent authority for registration will be the Registration Committee constituted by the Department for Promotion of Industry and Internal Trade (DPIIT). Political and security clearance from the Ministries of External and Home Affairs respectively will be mandatory.

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