New Delhi: In a bid to secure overseas contracts, state-owned Power Grid Corp. of India Ltd (PGCIL) is looking to form a joint venture with a private-sector firm involved in erection and construction of transmission lines outside India, a top company official said.
PGCIL is holding talks with companies such as Kalpataru Power Transmission Ltd (KPLTL) and Jyoti Structures Ltd (JSL) for pursuing overseas deals, he said on condition of anonymity. If it signs an agreement, it will be PGCIL’s first such partnership with a private company.
“We plan to leverage the presence of these private companies in geographies such as Central Asia and Africa, where they are already present. They have been present in those markets and are aware of the political, social, contractual and legal structures there and will help us in getting projects,” the official told Mint.
Questions emailed to spokespersons of KPLTL and JSL went unanswered.
According to data available on company websites, JSL has operations in 40 countries and KPTL is present in South-East Asia, West Asia, Africa and Australia. JSL recently formed a joint venture company in Dubai, Gulf Jyoti International Llc., in partnership with Gulf Investment Corp.
PGCIL’s plans are part of its larger strategy in establishing its foreign presence. However, it has been unsuccessful so far. It is looking at entering Africa, Central Asia and West Asia; the company is also pursuing projects in Uganda, Tanzania, Nigeria, Kazakhstan, Tajikistan, Nepal, Bhutan, Sri Lanka and Myanmar for engineering and consulting contracts.
PGCIL also plans to set up a subsidiary along the lines of ONGC Videsh Ltd, the overseas arm of oil and gas explorer and producer Oil and Natural Gas Corp. Ltd, as reported by Mint on 9 February.
Madanagopal R., an equity research analyst at Centrum Broking Pvt. Ltd, said: “Even if this JV happens, it will not be such a big opportunity, given the current slowdown in the global economy... Some of the orders in Africa are awarded through support from World Bank.”
PGCIL has an association with the World Bank and Mint had reported on 8 May about the Bank’s plan to help the company access the African markets. PGCIL owns and operates 69,500km of power transmission lines and transmits around 45% of the power generated in India through its network. It closed 2007-08 with a revenue of Rs4,700 crore and a net profit of Rs1,420 crore. It has a capital expenditure plan of Rs55,000 crore during the 11th Plan to March 2012, of which it has already invested Rs6,615 crore in 2007-08.