PowerGrid: Capex to be higher than Rs 22,500 cr in FY17

Says new power rate policy big positive for transmission sector

The central transmission utility PowerGrid Corporation of India Ltd (PGCIL) on Thursday indicated that its annual capex for 2016-17 will be higher compared to Rs 22,500 crore for 2015-16. This is largely due to the Centre's plan to pursue transmission projects worth Rs 1 lakh crore to evacuate power from the upcoming coal and hydro and from renewable projects.

The company chairman and managing director I S Jha told the Business Standard,  “PowerGrid will meet its capex target of Rs 22,500 crore for the current financial year. For the nine months, capex of Rs 16,891 crore has been done. The capex for next year will definitely increase, considering the transmission capacity addition being announced by the Centre.'' However, he declined to divulge further details.

PowerGrid Corporation's capex for 2013-14 was Rs 23,158 crore and Rs 22,456 crore for 2014-15.

He said that the company's net worth stood at Rs 42,465 crore and capital work in progress is of the order of Rs 46,000 crore as on December 2015. According to him, the company's turnover was reported at Rs 15,320 crore.

On impact of the cabinet approval for amendments to the national rate policy, Jha said it has made it clear that transmission is important and should be ahead of generation. ''PowerGrid Corporation is in an advanced situation with the policy giving impetus to transmission. The policy is a big positive for transmission sector in general. Earlier people were questioning why you need transmission. Now it is very important, it should be ahead of generation; therefore, plan it and make it. Besides, going by the policy, transmission will be under rate bidding. It is good for PowerGrid Corporation, which is very comfortable with it,'' he noted.

Further, Jha said that the policy envisages waiver in transmission charges for renewable energy projects as a whole. It was earlier only applicable to solar energy project.

On the Rs 3,500 crore under sea transmission project between India and Sri Lanka, Jha said it has not been called off but there has been slow movement. ''The basic reason is that when there is international project, first link is cost always. Sri Lanka will compare it and look into various issues. It takes time. Even though India had begun supply of power to Bangladesh in 2013, the dialogue was happening since 1990. Similarly, the dialogue is currently underway with Pakistan.”

In case of International projects it takes time,'' he informed.