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Indian PSUs continue reliance on Chinese equipment in strategic sectors

NewsIndian PSUs continue reliance on Chinese equipment in strategic sectors

To bypass Indian restrictions and escape scrutiny, Chinese companies are bidding for tenders issued by public sector undertakings (PSUs) by presenting themselves as entities registered in other countries.

NEW DELHI: Strategic Indian assets, including oil fields, oil processing plants and airports are being manned by CCTV cameras that are built by Chinese companies that are ultimately controlled by the Chinese government.
Strangely, despite Government of India under Prime Minister Narendra Modi barring government bodies and ministries from engaging with Chinese companies, especially when it comes to matters of security and surveillance following the incident at Galwan in June 2020, government PSUs (public sector undertakings) and ministries are still rooting for Chinese manufacturers and indirectly financing China’s People’s Liberation Army (PLA) by trying to award them government contracts.
Recently, a Rs 55 crore tender has been issued by the Karnataka state office of the Indian Oil Corporation Limited (IOCL)—a Government of India PSU—to Infinova, a company with Chinese connections. The tender has been given for the installation of CCTV surveillance cameras at IOCL’s operating locations, oil and lubricant storage units, aviation fuel station (AFS) and LPG plants. These cameras will be supplied by Infinova, a Pune-based company, but whose ultimate holding company is “Shenzhen Infinova Limited”, which is based in Infineon Park, Guanlan High-Tech Industrial Development Zone, Longhua New District, Shenzhen, China.
IOCL is right now in the midst of upgrading its audio-video security related infrastructure across the country, under which its regional offices are awarding tenders for the same. Similar tenders issued by the PSU for other states, including for West Bengal, have “recommended vendor and original equipment manufacturer list” containing the name of Infinova.
The pre-bid meetings for the IOCL Karnataka tender document—in which CCTV cameras are to be installed at 11 different IOCL locations across the state—were held on 2 August 2022, while the letter of award was released in the last week of December (27 December 2022), just days after the Indian Army and the Chinese PLA clashed at the Line of Actual Control (LAC) in Arunachal Pradesh on 9 December.
In the case of West Bengal, the tender relates to installing a new CCTV camera system in crucial sites at places like Port Blair in the Andamans; in Kolkata, Kalyani, Malda, Bagdogra and Siliguri in Bengal; and in Rangpo in Sikkim. Both the Karnataka tender, which has been awarded and the West Bengal tender, which is yet to be awarded, make it clear that the existing CCTV cameras that were installed at various places by Infinova in the past are to be retained. These include 45 cameras that were installed in 2018 in Rajbandh terminal in West Durgapur, West Bengal; 26 in Siliguri that were installed in 2019; 23 in Port Blair installed in 2018; and 10 in Rangpo that were installed in 2019.
The Sunday Guardian reached out to Infinova India for a response on the issue, including the details about its parent company. No response was received till the time this report went to press. The chairman of Infinova is Dr Jeffrey Liu, who was recognised as among the “30 Influential Chinese Security People in the 30 years of Chinese economic reform” in 2008.
The 2020-21 balance sheet of Infinova (India) Private Limited was signed by two directors, Li Haoling and Jeffrey Liu. They have mentioned the signing place as “China”, but they have shown themselves as residents of Florida, United States.
On 7 December 2019, the Shenzhen stock exchange informed investors that Shenzhen Investment Holding (SIH) has become the controlling shareholder and actual controller of Infinova, post the transfer of roughly 6 crore shares, accounting for 5.00% for a price of RMB 5.73, amounting to about 343 million RMB, which increased SIH’s share to 26.35% in the company.
The said shares of Infinova were brought by SIH from JHL Infinite, a company owned by Jeffrey Liu.
SIH is the investment platform which is classified as state-owned enterprises (SOEs) and are the economic and political bases of the Chinese Communist Party (CCP) and the Chinese state.
SIH comes under Shenzhen’s State-owned Assets Supervision and Administration Commission of the State Council (SASAC), which is an institution that directly reports to the management of the State Council.
Shenzhen Investment Holding Corporation, which is indirectly owned by the Shenzhen government, holds majority ownership in SIH. According to industry insiders, the Chinese companies that ultimately cater to the wishes of their own government agencies, to bypass Indian restrictions and escape scrutiny, are bidding for government tenders by projecting themselves as entities registered in other countries.
“It is a matter of great concern as in the present case, the CCTV feeds can be accessed by the Chinese military. Since the entities that are dealing in Chinese equipment quote a lower price, they, most of the time, emerge as L1 bidder (Lowest) and hence get the contract. The fact that Indian PSUs and government ministries are either ignoring the Chinese involvement in such bids or are recommending their names as ‘recommended vendors’ makes one wonder if they have come under some kind of Chinese influence,” an official source told The Sunday Guardian.
As per the company’s website, in 2020, it bagged a project for 2,100 cameras for an Indian Navy project. In May 2021, in an instruction issued by the Indian Navy titled “security concerns over surveillance cameras”, it had banned the procurement of cameras made by Hikvisison and its Indian subsidiary, Prama Hikvision, after it emerged that data loss can occur even if the cameras are not connected to an external network by way of programmed/coded servers or through embedded hardware for wifi/sim based connectivity or during maintenance/replacement from the memory/cache of the camera system.
Just like SIH, Hik group is a wholly-owned subsidiary of China Electronics Technology Group. China Electronics Technology Group is a state owned enterprise (SOE) owned and supervised by the SASAC.

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