State-owned electricity transmission company Power Grid Corp. of India Ltd (PGCIL) is in talks with at least four US companies to jointly bid for transmission contracts in that country.
“The transmission systems in the US, though big, are old systems. There is a stimulus package in the making to strengthen and rectify these old systems,” said a PGCIL executive, who declined to be identified. “We are talking with around four US firms to firm up partnerships for this augmentation programme.”
The Barack Obama administration is modernizing the country’s electricity grid and has allocated $4.4 billion (Rs20,988 crore) out of a $787 billion stimulus package.
“To start with, we are looking at a job size of around 400km of transmission links,” said another PGCIL executive, who also didn’t want to be identified.
The 300,000km power transmission grid in the US—which has seen repeated power outages in recent times—is one of the largest in the world.
PGCIL hasn’t been able to make much headway on its global aspirations. It has plans to set up a subsidiary along the lines of ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corp. Ltd (ONGC), to tap opportunities outside India, Mint had reported on 11 February.
“There is a great degree of competitiveness in the US. PGCIL has an experience in project management part and execution of projects. This would help PGCIL get exposed to new technology such as smart grid solutions and will enable them a toehold in the US market which is very large,” said Shubhranshu Patnaik, an executive director at consultancy firm PricewaterhouseCoopers. “There is a large investment opportunity that the current US administration has recognized. This is a definite opportunity for PowerGrid.”
PGCIL’s international plans are part of the company’s larger strategy of establishing a presence in other countries by operating networks in them. It also plans to leverage its association with the World Bank to expand its presence overseas.
PGCIL is looking at entering Africa, Central Asia, West Asia and India’s immediate neighbours in the subcontinent. It is actively pursuing projects in Uganda, Tanzania, Nigeria, Kazakhstan, Tajikistan, Nepal, Bhutan, Sri Lanka and Myanmar for engineering and consulting contracts.
PGCIL also plans to form a joint venture with a private sector firm involved in the erection and construction of transmission lines outside India. The company is in talks with Kalpataru Power Transmission Ltd and Jyoti Structures Ltd to pursue overseas deals, Mint had reported on 24 February.
PGCIL owns and operates 70,100 circuit km of transmission lines and transmits around 45% of the power generated in India through its network.
For the first nine months of the last fiscal, the company posted a net profit of Rs1,074 crore on revenues of Rs4,425 crore. 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, of which it has already invested Rs6,615 crore in 2007-08.
The company is yet to declare its results for the full year to 31 March.