State-owned electricity transmission firm Power Grid Corp. of India Ltd (PGCIL) is in talks with Advanced Engineering Associates International Inc. (AEAI) of the US to bid for a 500-circuit km transmission contract in Arizona, US.
“We have been approached by them to partner together for the contract,” said a top PGCIL executive.
“AEAI has approached us for this link. They have to put the EPC (engineering, procurement and construction) bid and want us to construct the project,” said another PGCIL executive. Both the executives did not want to be identified as talks were still on.
Questions emailed to AEAI executives on Friday remained unanswered.
US?President?Barack Obama’s administration is modernizing the country’s electricity grid and has allocated $4.4 billion (Rs21,340 crore) for this out of a $787 billion stimulus package. The 500km link is part of this stimulus package.
Mint had reported on 21 May about PGCIL being in talks with at least four US firms to jointly bid for transmission contracts in that country.
PGCIL’s US plans are part of its larger strategy to establish 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.
“If PGCIL, through this bid, gets a part of the US market action, it is beneficial for them. However, US is a very difficult transmission market for developers as getting regulatory clearances there is very difficult,” said Anish De, chief executive of Mercados EMI Asia, an energy consulting firm.
In addition to the US, PGCIL is looking at entering Africa, Central Asia, West Asia and India’s immediate neighbours.
It is actively pursuing projects in Uganda, Tanzania, Nigeria, Kazakhstan, Tajikistan, Nepal, Bhutan, Sri Lanka and Myanmar for engineering and consulting contracts.
The firm owns and operates 70,100 circuit km of transmission lines and transmits around 45% of the power generated in India through its network.
For 2008-09, it posted a net profit of Rs1,690 crore on revenue of Rs7,082 crore, up from a profit of Rs1,420 crore and revenue of Rs4,700 crore the previous year. On Wednesday, PGCIL shares were nearly flat on the Bombay Stock Exchange, closing at Rs117, while the benchmark Sensex index was down 1.03% at 15,173.46 points.