[Belt&Road] Empowering India

Along the western bank of the Bay of Bengal, 25 kilometers south of Cuddalore in southern Tamil Nadu, India, is a coal-fired power plant built by SEPCOIII Electric Power Construction Corporation (hereinafter referred to as SEPCOIII) from China. Completed on schedule, the project has greatly alleviated power shortages in the states of Andhra and Telangana.

Since entering the Indian market in 2005, SEPCOIII has constructed six large power stations in five states, creating total installed capacity of more than 10,770 megawatts, about 5.7 percent of India’s total market. With a contracted value of over US$7.3 billion, these projects have offered more than 40,000 jobs, making it the largest foreign power station contractor in the country.

Powerful Results

Duan Liandou presides over the company’s Indian business and manages the coal-fired power plant in Cuddalore.

Duan first visited India in 2006 as project manager of a 1x135MW circulating-fluidized-bed power station in the city of Bikaner, Rajasthan of northwestern India. “I was in the middle of nowhere in a totally new culture,” he recalls

Born near the sea, he had never experienced such dry, hot desert weather. “In 2002, our company took its first overseas order from Nigeria, followed by many other places around the world,” Duan grins. “We arrived in the Indian market in 2005.”

He soon accepted that the only way to secure work overseas was to adapt to the climate. He has worked in India for the past 11 years, in regions ranging from the desert hinterlands in the northwest to the Bay of Bengal in the northeast. The company now considers him an “India hand.”

“We have reinforced our firm foothold here with better plans for cost performance and stronger executive force than our rivals,” he asserts.

Duan was very proud when the Cuddalore project began operation. “Usually after the design is completed, we’ll do a pilot run of the unit to test its reliability,” he explains. “We’ll shut it down and check for any technical faults. Fortunately, everything ran smoothly during the entire test, which impressed the Indian proprietor tremendously. He said, ‘I’ve witnessed these tests many times, and they always have problems. I’ve never seen a plant pass on the first try.’”

Such a sharp performance record has won the company a sterling reputation abroad. SEPCOIII signed a contract to build the second phase of the same project, worth US$2.4 billion.

The Indian government amended its environmental protection law at the end of 2015, lowering its emission limit significantly and tightening the standards for power plants’ emissions treatments, especially desulfuration, denitration, and dust-extraction.

In 2012, the company built India’s Jhajjar Power Plant in compliance with all emissions standards. As the first coal-fired power generation project with desulfurizer in India, its nearly-zero-discharge value makes it the first environmentally-friendly power plant in the country. The project turned out to be a major milestone in overseas thermal power projects by Chinese companies and won numerous honors including a 2012 Outstanding Infrastructure Award, the top honor for infrastructure construction in India, the 2013 Lu Ban Award for Chinese Construction Projects (“Overseas Projects” Category) in 2013, the China Power Excellent Engineering Project Award, and China’s National Excellent Welding Project.

Localization

Duan Liandou is only one of many Chinese engineers working overseas. His company’s “going global” policy has fostered a wealth of talented personnel with international vision.

However, “going global” cannot succeed without localization, especially in terms of human resources. Not only can localization minimize the company’s costs, it also creates plentiful job opportunities for locals.

“Our company’s ratio of Indian versus Chinese employees has grown from the original 1:1 to 3:1,” illustrates Duan. To help local employees get up to speed more quickly, the company has implemented the “master-apprentice” mode, a traditional Chinese method of training new employees. A Chinese “master” guides three local employees in a certain task until they are each able to perform it independently.

At construction sites, dual cafeterias frequently deliver both Chinese and Indian food with an eye on respecting local dietary habits and letting the local employees feel equally treated. But the two are far from segregated: “Many Indian employees frequently dine in the Chinese dining hall and vice versa,” grins Duan.

“More and more Indian employees have gained a sense of belonging in our company,” continues Duan. “We now have many Indian employees who volunteer to work on other projects in diverse locations. Moreover, we promote from within and offer plenty of opportunities to move up: Some Indian employees now work in our headquarters in Qingdao, Shandong Province. Others have been dispatched to the Middle East to help with our projects there.”

Promising Prospects

As an emerging economy enjoying high-speed economic development, India has endured severe power shortages. Analysts predict that the Modi administration’s “Make in India” program will lead to explosive growth of demand for electricity in the years to come. The possibility of unexpected power cuts severely damages foreign investors’ faith in India-based production.

During his tenure as chief minister of Gujarat, Narendra Modi went to great lengths to ensure the state a 24-hour uninterrupted power supply, making it one of the few regions in the country to avert blackouts. His performance in this realm specifically inspired great expectations from the public when he assumed the role of prime minister. India’s rapid development in recent years has resulted in high demand for energy.

“I’m going to explore the Indian market more deeply,” Duan reveals. “The country has suffered a downturn in power construction over the past few years, ostensibly due to an underdeveloped power grid, incapable of handling current levels of production and still leaving many places without access to power. The country’s inefficient delivery system is glaring.”

Reports by India’s Economic Times support Duan’s opinion. Per the publication, more than 300 million Indians in rural areas survive without electricity. Surveys completed a year after Prime Minister Modi took office showed that more than 18,000 villages had no access to power.

As estimated by India’s Planning Commission, by 2031, India will need three to four times its current supply of energy, and five to six times more if its annual economic growth stays at 8 percent.

In recent years, guided by the framework of the Belt and Road Initiative, greater numbers of Chinese enterprises have explored overseas business opportunities, so SEPCOIII can’t rest on its laurels. “We just signed a contract to build the second phase of the Cuddalore project,” Duan beams. “Along with construction, we have invested in several additional projects in the hope of staying involved in the post-completion operation and administration of power stations to expand our company’s business scope.”

During his visit to Shanghai on May 16, 2015, Indian Prime Minister Modi held a roundtable meeting with 25 entrepreneurs from Chinese energy companies including TBEA Co., Ltd., Harbin Electric Corporation, Dongfang Electric, Hareon Solar and Trina Solar Limited, outlining his vision for future energy-sector cooperation between China and India.