REL may fail to transmit

PGCIL plans JVs for power transmission on same routes as Reliance.

Reliance Energy's plans to foray into the power transmission business on its own are in a limbo. PowerGrid Corporation of India Ltd (PGCIL) has decided to form joint ventures for power transmission on the same routes as proposed by Reliance Energy.

PGCIL, the central transmission utility, has called for joint venture partners for the 20 lines to be laid in the western region. But 13 sub-stations in the region will be built by PGCIL on its own.

PGCIL executives said Reliance Energy was among the 20 companies that had expressed interest in participating in the joint ventures with the public sector firm. The others include Tata Power, Crompton Greaves, Kalpataru, Gammon and Areva.

"The company will call for competitive bids and partners will be selected based on the tariffs they quote," said a PGCIL executive, adding that if competitive bidding was followed, then there was no point in rolling back the entire process.

"If some other company quotes a lower price, based on a transparent tendering process, the contract cannot be given to any particular company, even if it holds a licence," the executive added. Reliance Energy had sought licences from the Central Electricity Regulatory Commission (CERC) to set up 100 per cent private transmission projects.

When contacted, Reliance Energy executives said the CERC had not yet given its order and "it was too premature to comment". The order is expected to be issued by the end of the month.

The Central Electricity Authority (CEA) had informed the CERC that work on the project had to start soon as the western region system strengthening (WRSS) process was to start by March 2008.

But the power ministry had indicated that it would take at least three months to issue the guidelines on competitive bidding in transmission. Since the region is facing a severe power crisis and the WRSS had to be completed by a particular date, the CERC has decided to issue an order.

Responding to queries by the CERC, the CEA had divided 21 lines, to be built under the WRSS, into four packages and had said two packages with high-voltage lines, which were critical, could be undertaken by PGCIL. In the other two packages, which did not require the same level of technical expertise, competitive bids could be invited, it had said.

Beneficiaries had also indicated to the CERC that those segments of the scheme that could be implemented immediately, should be proceeded with, while for others, competitive bidding could be adopted.

PGCIL also went ahead with the process of selecting joint venture partners since the power ministry had directed it not to delay the process. The last date for companies to purchase request for qualification documents is July 15 and the documents have to be submitted to PGCIL by September 15.

"The way we have structured the process, if the regulator says that any or all of the packages have to be awarded based on competitive bidding, we can do it," said a PGCIL executive.