New Delhi, Sep 19 (KNN) Union Power Minister Piyush Goyal last week sought support from Indian Electrical and Electronics Manufacturers Association (IEMMA) for "exposing those who use second-grade sheets, recycled copper or any of these products which damage the life, quality or accuracy of electrical equipment, and bring bad name to country."

Goyal had said, "I brought to notice of Prime Minister Narendra Modi the incidents of electrical transformers catching fire in various parts of country, which may be due to over loading". He said that PM opined that substandard quality of the equipment was responsible for the damage.

He asked the electrical equipment manufacturers to ensure quality to face competition from China, Korea and other countries.

KNN India has been reporting about how the quality certification mechanism introduced by the government to prevent scrap grade CRGO steel from entering the country is apparently not working, with imports of non-prime material continuing unhindered for use by the transformer industry.

Meanwhile, an industry expert feel that when the government knows the root cause of the problem, making procurement procedure stringent and transparent would resolve the issue to a massive extent.

The expert said it is high time to make drastic changes in public procurement rules and laws to take into task the greedy vendors and conniving officials from BIS or Customs for sub-standard supplies.

Proper interrogation should be made DRI to crackdown the entire chain right from the supplier to the consumer to check cheap imports, the expert added.

The Sources had revealed how sub-standard material is dumped into the country by using fake BIS licence copies which is later used by the customs clear consignments.

Further to this, the non-prime CRGO consignments are passed off as hot rolled plate imports. Some 2.75 lakh tonnes of electrical steel is consumed in India annually.

Sources had said bulk of imports are coming via Nepal, where Indian companies have set up processing units, and entering India from eastern Uttar Pradesh and Bihar borders. It is not difficult to set up a processing unit as it hardly costs 10 lakh rupees.

It was revealed that processors are taking the help of HR scrap smelters for importing low-quality CRGO.   Some processors have set up units in special economic zones and free zones to import non- prime material against duty free licences and, after processing, the material is sold to transformer manufacturers here.

Last year, the transformer manufacturers had written to bring this to the notice of the directorate general of foreign trade (DGFT).

Scrap grade CRGO is available at just half of what prime steel would cost. A poor-quality transformer doesn’t just lead to inflated equipment bills for utilities but also compromises heavily with the safety of the users.

The annual requirement of the CRGO, also called electrical steel, for the Indian transformer industry is estimated at 3 lakh tonnes, which amounts to 12 per cent of the total world production.

However, the bulk of the electrical steel imported into the country is of scrap-grade which is available at half the price in countries like US, Japan, Korea, France, Italy, Germany, Russia and Poland, allowing unscrupulous traders to make 100-250 per cent profit.

Despite the order issued by the steel ministry in 2012 stipulating Bureau of Indian Standards (BIS) certification for CRGO imports, import of second-hand CRGO is still going on unhindered due to connivance of officials from BIS and customs. The entire import finds its way into transformer industry.

Usage of second-hand CRGO in transformers supplied by unscrupulous vendors to utilities makes it barely last for 3-5 years, though being capital goods they are supposed to have life of over 25 years.

Last year, Directorate of Revenue Intelligence (DRI) had raided factory premises and go-downs of at least six companies in Delhi and Jaipur, following a lead that these firms are involved in illegal trade of non-prime CRGO, sources had said. (KNN Bureau)