Q&A: S K Chaturvedi, CMD, Power Grid Corp

'We'll invest Rs 1 lakh crore in the next Plan'

Power Grid Corporation of India, the country’s largest transmission company, derives 94 per cent of revenue from this segment. It now plans to focus on its other businesses, of consultancy and telecom, aimed to contribute 15 per cent to revenue in the next five years. Chairman and managing director S K Chaturvedi talks to Mansi Taneja about the plans and growing consultancy business in markets abroad. Edited excerpts:

What investment will be done in the current financial year, also the last year of the 11th five-year Plan? What will be the company’s total capacity?
We had planned to invest almost Rs 55,000 crore in this Plan and we did Rs 38,000 crore in the four years. The rest of the amount, Rs 17,900 crore, will be invested in the current fiscal. Power Grid is the only company fully using its (budgeted) capex among all power PSUs.

We will be doing the target of 44,000 circuit-km lines of supply during the current Plan and will also achieve 28,000 Mw inter-regional capacity. We plan to invest over Rs 1 lakh crore in the 12th five-year plan.

Power Grid has picked up various consultancy assignments outside India. What are your expectations from this business?
About 94 per cent of our revenues come from transmission, which is a regulated sector. Consultancy and telecom segments are not regulated and we can thereby maximise our capacity in these two. We plan to go a big way in both these segments.

During the current year, we expect to finalise consultancy contracts with Myanmar, and with Sri Lanka for an undersea transmission project with India. We have recently signed a memorandum of understanding with Kenya for consultancy and we hope to bag more contracts this year.

You had recently leased out about 12,000 transmission towers for telecom use in four states. When do you plan to lease your towers on a pan-India basis? In the near future, how big do you think the telecom business will be for Power Grid?
The telecom business is more prospective in nature. The first avenue is to lease out towers. We will go pan-India by the end of the current fiscal; every quarter we will do leasing of towers in some areas. We have a total of 150,000 towers across the country.

We have also been selected as a major partner for laying out optical fibre for the government’s National Knowledge Network. We have also been shortlisted by the Unique Identification Developmental Authority for providing connection to panchayats through the country. We expect to increase our revenue from the consultancy and telecom business to 15 per cent from six per cent in the next five years. Every year, we are seeing a growth of 20-25 per cent on our revenues and we hope to continue that momentum.

How much do you plan to raise this year? And, how do you plan to fund the huge investment for the 12th Five-year plan?
We have Board approval for raising Rs 11,000 crore this fiscal through domestic bonds. We raised Rs 2,000 crore in the first tranche. Every quarter, we plan to raise Rs 2,000-2,500 crore. We had raised Rs 7,500 crore from the FPO (follow-on public offer) last year. Half the proceeds went to the government. Of the Rs 3,700 crore of the company from the FPO, around Rs 1,700 crore has been spent.

For the 12th plan, the funding will be done through internal resources, domestic bonds and bilateral funding. We are already in discussion with the World Bank and Asian Development Bank for raising $1 billion (Rs 4,432 crore) and $750 million (Rs 3,324 crore), respectively, and it will be finalised in the next three to four months. We also plan to go for another FPO in 2013-14 and raise Rs 5,000-7,000 crore.

What is the status of the undersea transmission line with Sri Lanka?
We have completed the feasibility report for the Indian side. Now, we will do the study for the Sri Lankan side for about Rs 58 lakh and submit the comprehensive project report within three months. Both reports will then go to the governments for a final decision, as in who will finance the undersea transmission link and what will be the mode of financing. We expect the 1,000 Mw capacity transmission line will come up in the 12th Five-year plan.