During the first three quarters of FY21, Power Grid Corporation of India Ltd (PGCIL) undertook cumulative capital expenditure of Rs.7,942 crore. However, its capitalization was much higher.
According to a recent investor presentation, PGCIL made capital expenditure of Rs.7,942 crore during the first three quarters (April to December) of FY21. On the other hand, capitalization during the same period, at Rs.12,574 crore was much higher.
Capitalization refers to capital expenditure that has translated into assets. In other words, it is the value of projects that get commissioned. Capitalization adds to the gross asset block. The rate of capitalization also alludes to the pace of project commissioning.
A finer analysis of the FY21 performance, reveals that Q2 (July to September) was the best quarter so far in terms of both capital expenditure and capitalization.
| Power Grid Corporation of India | ||||
| Q1FY21 | Q2FY21 | Q3FY21 | Total | |
| Capex (Rs.crore) | 1,906 | 3,100 | 2,936 | 7,942 |
| Capitalization (Rs.crore) | 1,184 | 10,709 | 681 | 12,574 |
In Q2FY21, PGCIL incurred capital expenditure of Rs.3,100 crore—the highest in any quarter of FY21. In Q1, capex was Rs.1,906 crore while in Q2, it stood at Rs.2,936 crore.
Capitalization during Q2 of FY21 was at a record level of Rs.10,709 crore. This was mainly on account of commissioning of Pole-1 of the Raigarh-Pugalur HVDC link. (Read more). In Q1 and Q3, capitalization was Rs.1,184 crore and Rs.681 crore, respectively.
Infrastructure addition in FY21
PGCIL, during the first three quarters of FY21, added 5,396 ckm of transmission lines. In terms of transformation capacity, this addition amounted to 15,301 MVA.
Besides, PGCIL could add around 1,500 mw to its interregional transfer capacity during FY21, taking the cumulative achievement to 88,590 mw. This represented around 85 percent of India’s total, the balance being accounted for by private players.
Orders on hand
As of December 31, 2020, PGCIL had orders on hand of around Rs.47,100 crore. Out of these, Rs.22,500 crore came from ongoing projects and Rs.9600 crore were from projects that were newly awarded. The remaining Rs.15,000 crore came from projects under the tariff-based competitive bidding mechanism.
Cross border link
Meanwhile, the Union government recently awarded PGCIL a project of national importance. This is a 765kV double-circuit cross-border Katihar (India) – Porbotipur (Bangladesh) – Bornagar (India) link.
According to information independently available, the transmission interconnection has been planned to connect Parbotipur/Barapukuria in Bangladesh to Katihar in ER (eastern region) and Bornagar in NER (northeastern region) through a 765kV D/C line to be initially operated at 400kV for supply of 500 mw power to Bangladesh in Phase I. Bangladesh will draw the power at Parbotipur/Barapukuria through HVDC back-to-back for further dispersal of the same to its own load centre.