India Inc charged up for power grids

Tatas, Reliance, Torrent gear up as sector opens.

Top companies, including Tata Power, Reliance Energy, Torrent and Essar Power, are planning to set up independent power transmission grids as the government is likely to open the sector for private participation.

According to a power ministry official, several companies, including these four, have shown interest in setting up independent transmission grids. The official pointed out that the government, however, was yet to finalise the guidelines for private investment in power transmission.

The Centre has announced an ambitious plan to add around 100,000 Mw of additional generation by 2012. In order to create additional grid capacity, it has planned to invest around Rs 71,000 crore.

Of this, PowerGrid Corporation of India Ltd will invest about Rs 50,000 crore and the remaining Rs 21,000 crore will be brought in by private investors.

The government will come out with revised guidelines on private investment in transmission soon. Under the guidelines that are being worked on, the government is considering both independent power transmission companies and joint ventures with state and central transmission utilities.

In joint ventures, a private player will contribute 74 per cent of equity and state-owned utilities will hold 26 per cent. In an independent transmission company, private entities will own 100 per cent equity.

According to the power ministry official, the new guidelines will also address private players' apprehensions that easy corridors will be reserved for PGCIL and the difficult ones will be allocated to the private sector.

Initially, the government plans to undertake pilot projects for both joint ventures and independent transmission. In the first joint venture pilot project, Tata Power is constructing a 400-KV transmission line from the Tala hydro electric project in Bhutan to Delhi. The project will be commissioned by July this year.

For the independent transmission route, the government is planning to take up the 400 KV Bina-Nagda-Dehgam D line in the western region as the first pilot project.