Dongfang Electric may move its headquarters and some plants out of the city of Deyang.

If this happens, many people will lose their jobs and the city a major tax contributor.

"This will be traumatic for us coming on the heals of the earthquake," Lu Shizhou, head of a local branch of Bank of China, said.

Zhang Zhiying, general manger of the leading State-owned company said on Tuesday the firm had decided to move its headquarters and plants out of Hanwang town, which is about 20 km away from Deyang.

"The final location is still pending," Zhang said.

It is possible the company could move to another town in Deyang.

China Daily learned earlier that Deyang had offered more than 130 hectares of land to the company for reconstruction.

However, there have been media reports that Chengdu and some other cities had also extended invitations to the leading turbine manufacturer. Its business has been brisk due to a booming demand in energy-related equipment in China and overseas.

Following the quake, China Huaneng Group quickly signed a 4.5 billion yuan ($650 million) contract with Dongfang Electric for power generation equipment 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.

Working at the bank in Hanwang for more than 10 years, Lu said the tax paid by Dongfang had partly helped Mianzhu, a county-level city governed by Deyang, enter Sichuan's top five county list.

"If the enterprise moves out of Deyang, it will definitely be another nightmare for the local economy," Lu said. His bank handles more than 80 percent of the company's financial business.

Before the earthquake, more than 30,000 of the company's workers and their families were living in Hanwang, which has been basically ruined by the quake.

Most of its residents have since been relocated to nearby Wudu town. Others, better off financially, have moved to Deyang.

"Nearly all of the apartments in Deyang have now been rented out," Yin Xianqing, manager of Decision Property Management Company, said. He said most of the renters were employed by Dongfang.

Yin said the workers do not want to buy apartments right now because they do not know "where their company will be moving in the future".

Even Chen Xinyou, former deputy general manager of the SOE and now acting mayor of Deyang, has no idea whether he will be able to persuade the company to stay in Deyang.

Recently, Vice-Premier Li Keqiang pledged that the central government will do its best to help the reconstruction of SOE during a visit to the quake-hit turbine maker.

Chen said the plant had secured a total of 133 hectares in the Deyang economic development zone and the Tianyuan economic zone for reconstruction. He also said the company had negotiated with private firms in the economic zones to form a partnership to assist its efforts to restore production.

"By six months, we will recover about 80 percent of our pre-quake production capacity," Chen said. He took up his current position last week.

"We will be back in full swing within two years," he said.

Chen said the management of the plant had rented new offices and started to work in Deyang but its registered office will continue to be in Mianzhu, thereby contributing to the tax revenues of the hard-hit region.

The quake, according to local statistics, killed more than 500 workers and students in Hanwang and the direct economic loss amounted to 5 billion yuan.

Currently, only about 500 workers, struggling against the heat, frequent aftershocks, and uncertainty about their future, are working at the dilapidated workshops of two plants.

Near the site of the jointing section, about 40 workers were transporting costly equipment out of a workshop whose pillars were damaged in the earthquake.

Much of this equipment can still be used after repair," Zhao Qiang, who heads the section, said.

For almost a month now, Zhao and his colleagues have been working nearly 12 hours a day and spending the night at Deyang for fear of aftershocks.

The children and the elderly have been moved to temporary housing, Zhao said.

"We workers therefore can devote our wholehearted efforts toward reconstruction," he said.

(China Daily June 12, 2008)