Sector majors shy away from bidding for transmission projects

Rs 4,000 crore worth of projects get tepid response

Three companies pulled out of auction for the Rs 400-crore Maheshwaram power transmission project. This is the second time in a week that transmission companies did not bid for projects despite qualifying.

The qualified bidders for the Maheshwaram project were state-owned Power Grid Corporation, Essel Infra, Sterlite Grid, Kalpataru Transmission, CLP India and a consortium of Tata Power and Tata Realty. Of these, only Sterlite, Power Grid and Kalpataru bid.

Larsen & Toubro on Tuesday pulled out of auctions for the Rs 823 crore Chhattisgarh A, Rs 1,976 crore Chhattisgarh B and Rs 863 crore Sipat transmission projects. European major Isolux also did not bid for two of the three projects. Jindal Power, too, had qualified for two projects but did not bid for either.

The winners of the Chhatisgarh A and B projects are likely to be named by Power Finance Corporation next Tuesday.

The investment expected on these four lines is Rs 4,000 crore. This was the first tranche of projects to go under the hammer after Power Minister Piyush Goyal said the government would increase transmission capacity to fulfill the National Democratic Alliance’s promise of  universal, uninterrupted electricity. This was also the second major investment sought from the private sector after bidding for two ultra mega power projects failed last year.

“Stalled projects are still a major contributor to delayed revenue and lower profitability for Indian companies. Most industrial capacities are underutilised due to lack of demand,” said Rathin Basu, country president, Alstom India & South Asia.

Experts said Power Grid’s domination of the market was pushing out private transmission companies. Apart from being nominated for sensitive projects, Power Grid bids for other projects and has close to 98 per cent share in the transmission market.

But for the first time in five years Power Grid did not bid for the Chhatisgarh A line. Government officials said Power Grid had its hands full and would focus on organic growth rather than bagging more projects.

This is unlikely to cheer private companies as regulatory uncertainty still abounds. New bid documents are still being drafted and right of way and land acquisition are major challenges.

“The government must draw the private sector back in the power sector," said a Delhi-based expert.

UNDER THE HAMMER
 

• Chhatisgarh A: Qualified were PGCIL, L&T , Essel, Sterlite Grid Jindal Power, Adani Power, Isolux, Kalpataru Power. Bids were submitted by Adani Power and Sterlite Grid

• Chhatisgarh B: Qualified were PGCIL, L&T , Essel, Sterlite Grid, Jinda Power, Adani, Isolux, Kalpataru Power. Bids were submitted by PGCIL, Adani, Sterlite Grid, Essel, Kalpataru Power

• Sipat: Qualified were PGCIL, L&T, Essel, SGL 3, Adani, Kalpataru. Bids were submitted by PGCIL, Adani, Jindal Power, Sterlite Grid, Kalpataru Power

• Maheshwaram: Qualified were PGCIL, Essel, Sterlite Grid, Kalpataru, CLP , Consortium of Tata & Tata Realty. Bids submitted by PGCIL, Sterlite and Kalpataru