Firm favours sourcing out transmission

State-run transmission company Power Grid Corporation of India Ltd has proposed that it be given the charge for transmitting over 400 kv power, with regional sub-transmission being handed over to other companies.

"Around 10-15 sub-transmission companies will handle regional transmission, which is limited to 220kv and 132 kv. Urban and semi-urban electrification can be privatised. In addition, a government-owned National Rural Electrification Company and power trading through private players, panchayats, co-operatives and franchisees are a possibility," said Power Grid Chairman RP Singh at an international conference on Open Access and Transmission Pricing.

"To facilitate open access, a reasonable level of redundancy in transmission, sub-transmission and distribution networks is required," he said, adding right pricing and a well-equipped maintenance and control system was also important.

"Currently, the institutional set-up is such that sub-transmission and distribution networks are controlled by states and there is no integrated development taking place," he said.

Liberalised electricity markets would require greater investment in transmission to ensure reliability of supply. However, traditionally, the transmission sector had been ignored in terms of investment the world over.

Only 28 per cent of total investments in the electricity sector went into transmission and distribution, he said, adding India needed investments of around $ 700 billion in the transmission sector over the next three decades.

PGCIL is seeking assistance to the tune of $ 2 billion from the World Bank and the Asian Development Bank to part finance its capital expenditure.

"We have sought $ 1 billion each from the World Bank and the ADB to fund our expansion plan and are hopeful of getting it soon," Singh told reporters on the sidelines of the conference.

The $ 2-billion loan will include the $ 400 million which the ADB had recently granted to the company. Singh said the money would be used for various projects across the country. The loan will be granted in one or more tranches.

The transmission sector in the country required investment of about Rs 71,000 crore in the 10th and 11th Plan periods, and PGCIL would invest over Rs 51,000 crore, he said.

Earlier, speaking on the occasion, RV Shahi, power secretary, said charges needed to be fixed to promote transmission, but this needed to be balanced with the consideration that investment required to be made attractive. "Pricing should encourage economic use of the transmission network," he said.