PGCIL plans Rs64,000 cr of transmission tenders

PGCIL plans Rs64,000 cr of transmission tenders

New Delhi: State-owned electricity transmission company Power Grid Corp. of India Ltd (PGCIL) plans to float tenders valued at around Rs64,000 crore in 2010-11 for nine high-capacity corridors that will transmit power from new projects in Orissa, Sikkim, Jharkhand, Chhattisgarh, Madhya Pradesh, Andhra Pradesh and Tamil Nadu.

“The Rs8,000 crore transmission link from Orissa has already received approval from Central Electricity Authority. The notice inviting tenders (NITs) are under preparation and we expect to float it by August," chairman and managing director S.K. Chaturvedi said. “All the nine transmission corridors that will evacuate power from independent power producers require an investment of around Rs64,000 crore."

“We plan to float the NITs for all transmission links in this financial year and it will take around one year for awarding them," he added.

The tenders will bring cheer to transmission engineering procurement and construction firms such as Kalpataru Power Transmission Ltd, Jyoti Structures Ltd, KEC International, Gammon India Ltd and Crompton Greaves, among others.

The bid award process involves pre-investment project preparation activities such as survey, land identification, preparation of detailed project report (DPR) and issuance of NIT resulting in the final award.

“Once a model contract is there, it is easier to float tenders for these bids. However, it is left to be seen how soon can they can award the tenders of these sizes," said the head one of the firms interested in bidding for the tenders. He declined to be named.

These nine corridors are aimed towards evacuating electricity from 38 private developers, having a generation capacity of around 42,000MW.

“This is a big tender. It will be a major positive for transmission engineering procurement and construction firms," said Madanagopal R., an equity research analyst at Centrum Broking Pvt. Ltd.

India has installed capacity of 157,000MW of electricity and plans to add around 62,000MW in the 11th Plan (2007-12). The demand for transmission network will further go up with the country planning to add 100,000MW capacity during the 12th Plan period (2012-17).

At present, there are five regional grids in India—northern, southern, eastern, north-eastern and western. All except the southern grid are interconnected.

PGCIL has a capital expenditure outlay of Rs55,000 crore for the 11th Plan (2007-12). While 35% of this outlay is for strengthening the transmission system, the balance will be used for setting up links to power generation projects.

For PGCIL, 30% of capital expenditure in any plan period comes from internal accruals, with the balance being funded by loans. Of the loan amount, around 40% is borrowed from the domestic market, with the balance coming from international lenders such as the World Bank and the Asian Development Bank.

PGCIL posted a net profit of Rs1,691 crore on revenue of Rs7,029 crore in 2008-09.