Around the Globe – Asia-Pacific

MHI beats Siemens to Taiwan orders

Mitsubishi Heavy Industries (MHI) has won an order from Taiwan Power Co. for a gas turbine cogeneration power plant in Taiwan’s southern city of Kaohsiung. The announcement came just days after the country approved the construction of four independent natural gas fired power plants.

MHI won the $108m contract, beating a rival bid from Siemens of Germany. The 248 MW power plant will be fuelled with LNG and will be situated alongside three existing units at Kaohsiung, all of which Siemens supplied equipment to.

Separately, the energy commission gave its approval to four independent power plants in an effort to boost the country’s generating capacity. The plants will have a total capacity of 3000 MW and will raise Taiwan’s power reserve margin to 20 per cent by 2004. Two of the plants will be built by Taiwan Cogeneration Corp., one by Ever Fortune, and one by the state-owned Chinese Petroleum.

Japanese suppliers have traditionally played a major role in Taiwan’s market for power generating equipment, but MHI had not won an order from Taiwan Power Co. for three years.

3G warning comes as bonds are issued

A petition warning that the Three Gorges Dam project is beset with technical and economic problems was sent to the Chinese government in July as the China Yangtze Three Gorges Project Development Corp. (CTGPC) made a bond issue to finance the project.

The petition was signed by 53 senior Chinese engineers and academic specialists and comes as the project is coming under increased public scrutiny. It was sent directly to president Jiang Zemin, and said that planning officials are risking disaster by changing the initial operating parameters of the dam.

The CTGPC issued in July yuan3bn ($360m) in registered bonds to help finance Three Gorges. Total capital demand for the project in 2000 will be yuan14.3bn.

Three Gorges planners have changed the original operating plan for the project to help offset its high front-end construction costs. The new plan involves filling the reservoir within the first six years of operation to maximize power output. The petitioners say this goes against a resolution of the Chinese People’s Congress to keep the reservoir level low for the first ten years.

  • Voith Siemens Power Generation has received an order for the supply of the exciter system for the fourteen 700 MW generators for the first phase of Three Gorges.

Escrow cover to be scrapped

India’s power ministry has said that it will develop a mechanism for funding power projects based on the progress made in power sector reforms in the various states. The new mechanism is likely to mean that escrow cover for independent power projects (IPP) will be scrapped.

The government will initially apply the new process to four power projects in Madhya Pradesh. The reform-based funding mechanism is designed to strengthen the financial viability of the State Electricity Boards (SEBs) and facilitate the completion of private power projects that have been delayed.

A number of financial institutions said recently that only five private power projects with a total capacity of 3000 MW are likely to achieve financial close this fiscal year. They blamed the poor financial health of the SEBs and an absence of proper security measures for the delays that most projects suffer.

Chinese power firms merge

Power producer Huaneng Power International has announced that it is to merge with Shandong Huaneng Power Development Company in the first deal of its kind in China. A Rmb5.76bn ($695m) takeover bid was launched in mid-July by Huaneng Power.

The deal sets a precedent for further consolidation in the country. Huaneng Power, which is listed in Hong Kong and New York, will pay Shandong Huaneng shareholders Rmb1.34 per share in cash. Analysts believe that Huaneng Power will obtain Shandong’s assets at a discount of up to 30 per cent because of Shandong’s poor share performance.

Quezon inaugurated

Philippine president Joseph Estrada has inaugurated the 440 MW coal fired Quezon power plant, the country’s first privately built, owned and operated power plant to be financed without government or sovereign guarantees.

Quezon is owned by a consortium consisting of InterGen, Ogden Energy Group, Global Power Investments and the PMR Group. It uses low sulphur coal imported from Indonesia, and started operating in the second quarter 2000.

News digest

Hong Kong: Mitsubishi Heavy Industries, Mitsubishi Electric Corp. and Mitsubishi Corp. have received an order from Hongkong Electric Co. to convert a gas turbine-based power plant into combined cycle operation. The Mitsubishi consortium will add two heat recovery units and a steam turbine to the two existing 250 MW gas turbine units at the Lamma power plant. The project will boost the plant’s output by more than 40 per cent. The upgraded plant will enter commercial operation in June 2002.

Japan: Siemens KWU and its licensing partner Fuji Electric have been awarded a contract to supply a V94.2 gas turbine and associated equipment to a 230 MW combined cycle power plant under construction near the city of Yokohama. The plant is owned by independent power producer Tomen Power Yokosuka, and will enter commercial operation in 2005.

Nepal: Nepal has announced that it is seeking tenders worth $2.6bn for seven hydropower projects, including the Arun-3 scheme, which was cancelled by the World Bank in 1995 over environmental concerns. The country is facing power shortages and will be unable to rely on northern India for power as it, too, is facing a deficit.

North Korea: North Korea has renewed its threat to restart its nuclear programme if the USA does not compensate it for the loss of electricity generating capacity caused by a delay in building new nuclear capacity in the country. Under a 1994 accord, the USA pledged to provide North Korea with two nuclear power plants by 2003 in return for the freezing of the country’s nuclear programme, which the international community suspected could be used for military purposes.

Pakistan: The Hub Power Company (Hubco) has refused an invitation from the World Bank to meet with Pakistan’s state power utility, the Water and Power Development Authority (Wapda), to try to resolve a long-running dispute over power tariffs. International Power, the international unit of the UK’s npower and owner of Hubco, is reported to be considering taking action in US law courts in order to resolve the dispute. The row surrounding the $1.5bn, 1292 MW power plant has been going on for three years.

Thailand: Amata Power Ltd. of Bangkok has awarded a contract for power generating equipment to GE Power Systems. GE will supply two MS6001B gas turbine generators and auxiliary equipment to a 112 MW combined cycle power plant being constructed in Bang Pakong, Thailand. The plant is scheduled to begin commercial operation towards the end of 2001.

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