The Hindu Business Line : Bidding plan for transmission being finalised

New Delhi, Oct. 2 On the pattern of ultra mega power projects, the Centre is in advanced stages of finalising standard bid documents for inviting private sector participation in the transmission sector through a slew of tariff-based competitive bidding projects.

The Government is finalising the bid documents based on its Tariff Based Competitive Bidding Guidelines for Transmission Service, in consultation with the State-owned Power Finance Corporation (PFC), Government officials said.

PFC, REC roped in

The Power Ministry has roped in PFC and Rural Electrification Corporation (REC) for carrying out the groundwork on identified transmission lines to be executed through the process and three special purpose vehicles (SPVs) have been set up to kick-start the initiative.

The SPVs have been incorporated as Bokaro-Kodarma-Maithon Transmission Company Ltd and East-North Interconnection Company Ltd (both set up as subsidiaries of PFC) and REC Transmission Projects Company Ltd (set up by REC).

The SPVs have been entrusted with the responsibility of preparing project profiles and obtaining necessary clearances to set the stage for these projects to be handed out to private players, as was done in case of the ultra mega projects.

“The idea is to facilitate private developers participating in transmission and ensuring higher levels of involvement in the transmission sector,” an official said.

Hitherto, private sector participation in the country’s transmission sector has way below expectations. Against a capital investment target of Rs 9,100 crore from the private sector in the sector during the Tenth Five Year Plan, only Rs 1,612 crore actually trickled in during the five-year period.

Through Joint Ventures

Private participation so far has largely been through joint ventures with state-owned Power Grid Corporation of India Ltd (PGCIL). Through the fillip being provided to private sector participation in the sector, the Centre is banking on increased levels of investments coming in during the current Plan period.

Out of a total of Rs 75,000 crore investment envisaged in transmission sector during the Eleventh Plan, about Rs 20,000 crore is expected to come in through the private sector.

Besides the competitive bidding-based projects, private sector investment in transmission is also sought to be encouraged through the entry of generating companies in building their dedicated transmission lines and through more joint ventures with PGCIL, where majority equity is to be brought in by the private developer.

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