Power transmission projects hit by delays, red tape

Clearances stuck by more than a year, private projects in the slow lane

Over a year after a top panel approved awarding several power transmission projects through competitive bidding to private players, these are yet to see the light of day. Also, the total value of projects on offer has come down by more than 90 per cent in the past three years.

 

Since July 2016, when the Empowered Committee on Transmission previously met, no new project has been approved despite growth in power access network with various central schemes.

 

Of the projects approved in 2016, four, including the one connecting a solar park in Fatehgarh, are yet to awarded or issued for tariff-based competitive bidding (TBCB). According to industry data, the delay is close to 422 days.

 

The Eastern Region Strengthening Scheme, which called for interest submission in December 2016, is yet to be issued for bidding after six extensions. Similarly, the bidding date for the WR-NR inter-regional corridor has been extended nine times since November 2016.

 

“Ease of doing business in the power infrastructure space has taken a backseat with such delays. The basket of projects has also not increased in recent years. The muted power demand and renewable energy capacity would need enabling transmission in the coming years. Lack of planning now would create mismatch later,” said an executive with a power infrastructure company.

 

Power transmission projects are awarded in two modes — on a cost-plus basis to state-owned Power Grid Corporation, and through TBCB to private players since 2010.

 

“The time taken for award of transmission projects under the TBCB mode is a major bottleneck for integration of such projects with generation evacuation schemes, particularly solar projects. There is an urgency to fast track the project award process timeline under the competitive bidding regime,” said a senior sector executive.

 

Power Grid is betting on state projects for growth. “In intra-state transmission, Rs 1.5 lakh crore worth of work is expected. Positive impact of UDAY and Centre’s various reform programmes in states would kick-start investment in sub-transmission and distribution,” said the company in its presentation during the last quarter results.

 

PGCIL executives added the power transmission sector would see a massive investment of Rs 2.6 lakh crore by 2022 with close to 106,000 km of transmission lines and 292,000 MVA of transformational capacity (capacity of substations).

 

Out of the envisaged Rs 2.6 lakh crore, Rs 1 lakh crore would be invested by PGCIL and the balance would be awarded to private players through TBCB.

 

But industry executives also pointed to the reducing basket of projects to be awarded through bidding. Of the 18 projects approved in 2016, 11 projects were awarded on a cost-plus basis and the remaining on the TBCB mode. Total worth of the approved projects was Rs 8,275 crore.

Slow progress

• Total value of power transmission projects on offer has come down by 90 per cent over the past three years
• The Empowered Committee, which approves power transmission projects for bidding, last met in July 2016
• Since then, no new project has been approved, despite growth in power access network with various Central schemes
• Eastern Region Strengthening Scheme, which called for interest submission in December 2016, is yet to be issued for bidding, after six extensions 
• Bidding date for the western and northern inter-regional corridors has been extended nine times since  November 2016
• Power transmission projects are awarded in two modes — on a cost-plus basis to state-owned Power Grid Corporation, and through TBCB to private players since 2010