The Cabinet Committee of Economic Affairs (CCEA) is expected discuss the issue of amending the Electricity Act when it meets here on Wednesday (tomorrow).
The amendment bill, which has been hanging fire for the past three years, will enable participation of Indian and foreign private companies in the transmission sector.
The CCEA is expected to clear the official amendment bill during the Wednesday meeting. It will be placed before the monsoon season of Parliament after that.
The power ministry has been particularly keen on the amendment because it feels that the PowerGrid Corporation does not have the capability to raise the necessary funds to meet the current gaps in the transmission sector and the fresh gaps that will be created once the independent power sector starts generating additional power in large quantities.
Studies have shown that an additional 7,000 mw can be added to the capacity by merely improving the level of efficiencies in the transmission systems and filling the gaps in transmission. This itself will cost Rs 7,000 crore.
Several international majors, including UKs National Power Grid Company, have been trying to enter private transmission business in India. National Power Grid and Tata Power have bid for evacuating the power generated by Cogentrix.
The ministry is particularly keen on opening the sector because it will have to invest an additional Rs 20,000 crore on transmission in the ninth plan, if the private companies do not enter it. At the same time, it is not in a position to spare funds to the transmission sector because of its involvement in power generation.
State governments have been pressing the Centre to throw open the transmission sector in order to make private generation units in the respective states more viable.
