PGCIL's petition for tariff hike rejected

The Central Electricity Regulatory Commission (CERC) has turned down the Power Grid Corporation of India Ltd's (PGCIL's) petition to allow it to hike tariff from the 400 KV D Bina-Nagda-Dehgam transmission line.

It has, however, said changes in interest during completion, in case the company took loans on floating interest rates, and any changes on account of changes in the law, would be passed on in the tariff.

Earlier, a bid by the consortium of Tenega Nasionale Barhad, Malaysia, and Kalpataru Power Transmission Ltd to construct the line was turned down.

This was because PGCIL, in its position as the central transmission utility, had said the project could be completed at a cost less than what had been bid by the consortium.

The consortium had said the estimated completion cost of the project was Rs 657 crore, and that the levelled tariff should be Rs 99.47 crore for 30 years.

PGCIL, however, put the completion cost at Rs 617 crore, and leveled tariff at 73 crore a year for 30 years. The CERC, therefore, turned down the transmission licence application of the consortium. It also gave an order stating that the project should be completed at a cost of not more than Rs 617 crore.

PGCIL had subsequently submitted a petition for revising the completion cost to Rs 686.3 crore because of higher prices of inputs like steel, zinc, aluminium and cement.

The CERC, however, has turned down the petition. It said steel prices had started moving down, and that steel prices would move up had also been pointed out by the consortium at an earlier stag and was disputed by the PGCIL.