China Rules Block Overseas Bids for Energy Projects, Group Says Go back »

2009-05-28 | All chapters

China Rules Block Overseas Bids for Energy Projects, Group Says
Kevin Hamlin, Bloomberg, 27th May 2009

Overseas companies have lost out on 5 billion euros ($6.95 billion) of wind energy projects under China’s economic stimulus plan because bidding criteria make it impossible for them to compete, the European Union Chamber of Commerce in China said.

"All the foreigners are out of the race,” Jorg Wuttke, the chamber’s president, said at a media briefing in Beijing today. “There seems to be a drive by the central government to award this to Chinese and not Europeans established in China.”

General Electric Co., Suzlon Energy Ltd., Gamesa Corp. Tecnologica SA and Vestas Wind Systems A/S were among companies bidding for 25 wind energy projects with generation capacity of 5.25 gigawatts, according to Wuttke. The projects are part of China’s 4 trillion-yuan ($585 billion) spending plan, he said.

Evidence countries are protecting companies from international competition risks triggering trade tensions as the world economy reels from its deepest recession since the Great Depression. European companies lost 21 billion euros of business in 2006 because of investment barriers and trade hurdles in China, according to the chamber.

Wen Bugao, a spokesman at the National Development and Reform Commission, the country’s top economic planner, didn’t answer phone calls to his office. The Commerce Ministry said last month China won’t practise any form of protectionism or take stimulus measures that may violate World Trade Organization rules.

Disqualified

The bidding criteria make it easy to disqualify overseas companies on technical grounds, Wuttke said today. Bidding procedures favor local firms because they are based on “price submission” and don’t take into account factors such as life- cycle costs, equipment reliability and rates of return, he said.

China isn’t buying equipment from overseas wind turbine makers as the rules for supplies to wind farms in tenders are unclear, Paulo Fernando Soares, chief executive officer of the China unit of Suzlon Energy Ltd., said on May 13 at a conference in Beijing. “There’s no open public bidding” and foreign suppliers haven’t sold equipment for more than three years to local projects in China, he said.

Xinjiang Goldwind Science & Technology Co., China’s biggest maker of wind turbines, has said local suppliers aren’t favored and their equipment is cheaper than that of international companies.

"The rules are same to all,” Yu Danke, Goldwind’s chief financial officer, said at the same conference.

Source: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTxEvHLV3B20