Industry & Economy
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Power
PowerGrid may enter generation through management contracts
Pratim Ranjan Bose
Kolkata
,
Dec. 21
POWERGRID Corporation of India Ltd (PGCIL) is considering an indirect entry into generation through management contracts. The business may be done through a special purpose vehicle.
PGCIL, a declared Central transmission utility, is not allowed direct entry into generation.
Parallel to its consultancy services, PGCIL is also considering taking up renovation and modernisation and distribution and transmission system management for other companies on contract basis.
Though he did not disclose any specific business opportunity, the company chairman, Mr R.P. Singh, told Business Line that the existing Act did not bar the company from taking up management of a generation business on contract basis. "I feel we can exploit such emerging opportunities. If necessary, we will roll out a subsidiary to handle the management agency business."
PowerGrid had previously decided to participate in joint ventures with generation companies for taking up related transmission systems jobs. To this effect, the company has entered into joint ventures with five companies, including ONGC, Essar and the Jaiprakash group.
It may be mentioned that PowerGrid has already diversified into telecom and consultancy. "While consultancy services are doing well, we are hopeful that the telecom business will break-even in 2007-08. Having registered a Rs 15-crore turnover in the first year of operation in 2004-05, telecom is expected to record net sales of Rs 60 crore this fiscal. The targeted turnover in 2007-08 is Rs 250-300 crore.
On the overall performance, Mr Singh said the company was expected to record a net profit of over Rs 1,000 crore in 2005-06 against a targeted Rs 850 crore.
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