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Contract lifeline for Dongfang

By Wan Zhihong (China Daily)
Updated: 2008-05-27 09:06

China Huaneng Group has signed a 4.5 billion yuan ($648.33 million) contract with Dongfang Electric for power generation equipment supply in a move to help the earthquake-hit company get back on its feet.

Under the agreement, Dongfang will provide Huaneng six thermal power units, each with a capacity of 660 mW. The company will also provide several wind power units, with a combined capacity of more than 4,000 mW, Huaneng said.

This is the largest contract Dongfang has got since the May 12 earthquake. The company was one of the State-owned enterprises hardest hit by the earthquake, according to the State-owned Assets Supervision and Administration Commission.

The quake severely damaged Dongfang Electric's steam turbine business. Several buildings of the company's plant in Hanwang in the city of Mianzhu collapsed, killing about 100 people, said the company.

But the quake has had marginal impact on the company's boiler and power generator businesses. Except for the steam turbine plant in Mianzhu, other plants under the company have started operation.

Huaneng will join forces with Dongfang to help the company's reconstruction, said Li Xiaopeng, general manager of Huaneng. The company has donated more than 10 million yuan to Dongfang for the purpose. Apart from the new order, more than 5,000 mW of Huaneng's power equipment are already under production in Dongfang.

Several other companies have also signed contracts with Dongfang since the quake. China Energy Conservation Investment Corporation last week signed a 1.24 billion yuan contract with Dongfang for the supply of 134 wind power units.

Bank of China also extended to Dongfang a 30 billion yuan credit line to help fund reconstruction of factories damaged by the earthquake.

Shares of Dongfang Electric yesterday rose 8.49 percent to 32.70 yuan on the Shanghai Stock Exchange.