Is DRI sparing big fish using non-prime steel for transformers?
Updated: Dec 08, 2015 02:41:22pm
New Delhi, Dec 8 (KNN) After initial crackdown against transformer manufacturers using non-prime steel, mostly those headquartered in Rajasthan, the Directorate of Revenue Intelligence (DRI) seems to be going soft on this illegal trade, leaving the industry to wonder why big fish are being spared.
Industry sources said that a big name in large electrical equipment and transformer association headquartered in Mumbai, who has been patronized by big sharks, has never complied with the quality control order issued by the Steel Ministry to bar import of second-hand CRGO. Not only that, it has been conspiring to take the matter for cancellation of the order in parliament using its proximity to some Members of Parliament and high-level bureaucrats at the Centre.
Industry players told KNN on the condition of anonymity that the recent raids by the DRI on a handful of non-prime CRGO traders in Rajasthan are unlikely to make any impact given that this malpractice is rampant and in Rajasthan alone, there are more than 100 units involved in processing of the low-quality steel brought from overseas.
“It is tip on ice berg; action should be extended to other states of the country. Unless DRI catches big fish who are manufacturing power transformers, this menace will not stop,” said one manufacturer.
Given the financial loss being suffered by utilities due to use of dubious quality steel in transformers, the source said, “Any amount of re-structuring and investment shall not bear any fruits and the target of providing 24x7 power to all in the current 12th plan period could prove a pipedream.”
The source added, the use of spurious material in the manufacture of equipment is also responsible for the financial mess in the power sector.
“So far no action has been initiated against traders getting the spurious CRGO from abroad in SEZ zones and freely selling the material to manufacturer of power distribution transformers,” the source said.
Dwelling on the modus operandi of this illicit trade, the source said, importers/ processors get the non-prime, mills left over, scrap, spurious CRGO material from all over the world in SEZ zones. Since these zones are not subjected to any rules and regulations for customs clearance at ports, material is stored in the godowns there and sold to the manufacturers of power and distribution transformers at dirt cheap rate of 30 per cent of prime material price.
The source further said that in a recent case transformers exported to one country were rejected and shipped back to the Indian exporter, giving a bad name to the Indian industry.
“Concerned authorities have been informed of this malpractice but there is no action,” the source said.
“Unless the Government of India takes severe action against such manufacturers and trade, this menace will continue as it has been going on for last two decades and the quality control order will remain just on paper,” the source added. (KNN Bureau)
Industry sources said that a big name in large electrical equipment and transformer association headquartered in Mumbai, who has been patronized by big sharks, has never complied with the quality control order issued by the Steel Ministry to bar import of second-hand CRGO. Not only that, it has been conspiring to take the matter for cancellation of the order in parliament using its proximity to some Members of Parliament and high-level bureaucrats at the Centre.
Industry players told KNN on the condition of anonymity that the recent raids by the DRI on a handful of non-prime CRGO traders in Rajasthan are unlikely to make any impact given that this malpractice is rampant and in Rajasthan alone, there are more than 100 units involved in processing of the low-quality steel brought from overseas.
“It is tip on ice berg; action should be extended to other states of the country. Unless DRI catches big fish who are manufacturing power transformers, this menace will not stop,” said one manufacturer.
Given the financial loss being suffered by utilities due to use of dubious quality steel in transformers, the source said, “Any amount of re-structuring and investment shall not bear any fruits and the target of providing 24x7 power to all in the current 12th plan period could prove a pipedream.”
The source added, the use of spurious material in the manufacture of equipment is also responsible for the financial mess in the power sector.
“So far no action has been initiated against traders getting the spurious CRGO from abroad in SEZ zones and freely selling the material to manufacturer of power distribution transformers,” the source said.
Dwelling on the modus operandi of this illicit trade, the source said, importers/ processors get the non-prime, mills left over, scrap, spurious CRGO material from all over the world in SEZ zones. Since these zones are not subjected to any rules and regulations for customs clearance at ports, material is stored in the godowns there and sold to the manufacturers of power and distribution transformers at dirt cheap rate of 30 per cent of prime material price.
The source further said that in a recent case transformers exported to one country were rejected and shipped back to the Indian exporter, giving a bad name to the Indian industry.
“Concerned authorities have been informed of this malpractice but there is no action,” the source said.
“Unless the Government of India takes severe action against such manufacturers and trade, this menace will continue as it has been going on for last two decades and the quality control order will remain just on paper,” the source added. (KNN Bureau)
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