Central transmission utility Power Grid Corporation of India Ltd (PGCIL) whose main mandate is development of interregional lines, is willing to support the development of even intrastate power transmission infrastructure, noted I.S. Jha, Chairman & Managing Director, PGCIL. Jha was speaking to T&D India at the sidelines of the company’s recent press conference in Mumbai.
PGCIL’s support to intrastate power transmission network can assume various modalities. The Central power transmission utility is willing to form joint ventures with state government utilities, develop intrastate power transmission lines under the tariff-based competitive bidding (TBCB) route or even extend its support by way of pure consultancy projects, noted Jha.
The power ministry has been generally advising state government utilities to accelerate their intrastate power transmission network so that the benefits of the National Grid (interregional lines) can percolate to the states. The Centre has also suggested that if any state government experiences shortage of funds, manpower or technology, they should consider forming joint ventures with PGCIL. “Though sometimes there are obstacles from state governments in forming JVs, we are open to it,” noted I.S. Jha.
In the context of JVs with state government utilities, PGCIL has to its credit one joint venture so far. This is Bihar Grid Company Ltd, a 50:50 JV between PGCIL and the Bihar state government, represented by Bihar State Power (Holding) Co Ltd, incorporated in January 2013. After the initial years that did not see much activity, matters have now turned positive. I.S. Jha explained that a set of projects valued at Rs.1,600 crore were assigned to the JV and so far, 80 per cent of this has been completed. “The Bihar government has entrusted more projects also valued at around Rs.1,600 crore,” Jha said. According to information available with T&D India, some power transmission infrastructure completed by BGCL includes five 220kV GIS bays at the Hajipur substation and the 220kV double-circuit Hajipur-Chapra transmission line.
It may be mentioned that PGCIL was pursuing a similar joint venture with Odisha but matters did not progress beyond the initial discussions. Jha noted that there exists opportunity for development of intrastate lines in states like Uttar Pradesh, Haryana, Jharkhand, Rajasthan, etc. However, PGCIL’s involvement need not be in the form of joint ventures.
Power Grid Corporation of India Ltd has been very successful in developing transmission lines, mainly interregional, under the TBCB philosophy. It may be mentioned that such projects are handled by dedicated special purpose vehicles floated by nodal agencies Power Finance Corporation (PFC) and Rural Electrification Corporation (REC). The development of large transmission projects under the TBCB route started in around 2007. At that time, both PFC and REC were entrusted with interregional projects. However, in recent years, the two nodal agencies are also handling transmission lines confined to a state. It is also interesting to observe that some state governments like Haryana, Rajasthan and Uttar Pradesh are also independently developing intrastate lines under the TBCB philosophy. However, states generally handle projects that are relatively smaller in terms of capital outlay.
In the context of intrastate TBCB projects, I.S. Jha noted that PGCIL would not be interested in smaller projects but instead in larger and technologically challenging ones. Haryana, for instance, has projects in the region of Rs.100-150 crore capital outlay, which PGCIL would not be very inclined to participate in, Jha noted. On the other hand, PGCIL was very keen to win the Ghatampur power transmission project in Uttar Pradesh but ultimately could not clinch it. This project, as some industry sources point out, was fiercely contested between PGCIL and a private developer. (See box: Ghatampur Project)
Even as JVs and TBCB projects could prove important agents for PGCIL’s intrastate power transmission endeavour, PGCIL expects that much of its involvement with state-level projects would be in the form of consultancy projects.
The PGCIL CMD noted that currently the Central PSU was implementing Rs.16,000 crore worth of consultancy projects. Much of this was for projects in northeast India and some northern states like Sikkim and Jammu & Kashmir. Jha explained that in such projects funding is done by the state government or through grant from Government of India and PGCIL’s role is to provide expertise through consultancy. “If state governments have funds, we can work on consultancy basis,” was how Jha summarized it. It is also worth mentioning that consultancy projects are free of capital expenditure, and there is also no project risk involved on part of the consultant. “Such projects add directly to the bottomline,” noted Jha with a sense of satisfaction.
(Featured photograph shows a transmission asset of Bihar Grid Company Ltd.)