New Delhi: Power Grid Corporation of India (PGCIL) chairman IS Jha blamed private companies for power system transmission woes and rubbished allegations of monopolistic practices levelled against the state-run company by its competitors. In an interview to ET, he said that 80% of transmission projects awarded to private sector were delayed. Edited excerpts:
How would you respond to private companies’ allegation that PGCIL purposefully mismanages transmission planning so that the lines get delayed and are given to PGCIL on nomination basis?
The transmission planning process is collaborative and transparent. There is a well-established procedure of planning of transmission system, under which transmission planning is carried out by the Central Electricity Act (CEA) in association with CTU, POSOCO and other stakeholders. The technical approval of the transmission scheme is given by the Standing Committee on Power System Planning, which is convened by the CEA and is comprised of stakeholders including the CEA, CTU and POSOCO. Once the system is approved, the empowered committee convened by the CEA recommends the modalities, and based on this recommendation the power ministry decides the implementation route (through bidding or otherwise).
The transmission system planning is done on need basis, assessed taking into consideration the applications, inputs provided by state transmission utilities, operational feedback report from POSOCO and other inputs from various other stakeholders. When transmission system is planned, the required date and the timeframe for implementation are clearly mentioned. As on date, no LTA application case is pending with the CTU for planning consideration. The allegation that the CTU purposefully delays transmission planning is absolutely incorrect. In the past three years, all major transmission projects have been awarded only through TBCB (tariff based competitive bidding).
Private companies allege government bias and say a proposal to give large green energy corridor projects to PGCIL may render them non-competitive….
We are not aware of any such proposal to give any large green energy corridor project to Power Grid. This allegation is completely unfounded. In fact, the transmission systems are yet to be evolved for the new renewable energy additions. For that purpose, I understand that a committee comprising of members from renewable energy ministry, Solar Energy Corp of India, CEA and CTU has been constituted to study and evolve new transmission system based on the potential locations for renewable energy.
Have projects awarded to PGCIL been completed on time? Private companies say a lot are late, defeating the purpose of allotment on nomination basis.
This allegation is also completely baseless and devoid of any facts. Power Grid has commissioned (projects worth) more than.`90,000 crore in the last three financial years. Our important projects such as Green Energy Corridor-I are on schedule and being commissioned matching with generation. Similarly, for the HVDC Raigarh-Pugalur project, as on date, the progress so far is six to 12 months ahead of schedule. There may have been genuine reasons for the delays but to issue a blanket statement that Power Grid projects get delayed and private players come up on time is misleading.
Private players also accuse PGCIL of profiteering, saying your tariff-to-cost ratio for cost-plus projects is 17.5% but comes down to 13.5% if there is competition.
This statement is again misleading. In cost-plus, tariffs are higher in the first year, decreasing gradually every year and falling considerably from 13th year onwards due to higher depreciation rates allowed for principal repayment of loans for initial 12 years, while in the TBCB projects, the levelised tariff depends on the discounting factor. All quoted tariffs for each year are reduced to a single number using this discount rate.