The Finance Ministry has granted excise duty exemption to goods (equipment supplies, cement and steel) procured for setting up UMPPs with greater than 3,960 MW of installed capacity. Moreover, there will be no countervailing duty on imports, which will help lower the overall project cost. Equipments such as boilers and turbines account for a large component of the total project cost of UMPPs.
Till date, only foreign suppliers have bagged the contract for installation of equipments for UMPPs – Shanghai Electric Co. (China) for Sasan, and Doosan (South Korea) for Mundra. Indications are that for Krishnapatnam UMPP as well, the contract for installation of equipment will go to a foreign supplier. Reliance Infrastructure had earlier signed an agreement for long-term co-operation with Shanghai Electric Co. for various identified areas in the power sector.
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