Slow growth in transmission due to lengthy execution process: FICCI

Transmission projects in the country take about 5 years to complete, a factor responsible for the slow rate of growth in the sector, says a report.

"An important factor for the slow rate of growth is the long process time from conceptualisation to commissioning," says a FICCI report on Power Transmission said.

In the current system, average time from concept to commissioning is about 60 months or 5 years.

As per the report, "It takes three months for a project approved in Standing Committee to come to the Empowered Committee for approval."

Post the Empowered Committee's nod, it takes eight months in finalisation of the structure of the project, which includes formation of SPV (special purpose vehicle) by Bid Process Coordinator, appointment of a consultant and publishing of RFQ (Request for Qualification).

The Bid Process Coordinator carries out a survey, evaluates technical bids, and publishes RFP (Request for Proposal) and invites financial bids. This process takes about nine months.

After the successful bidder is awarded the project, from there on the execution takes about 40 months.

The report observed that there is significant scope to compress the planning process and reduce redundant steps, cutting short the commissioning time.

The transmission sector is already lacking in investments made so far. Although 50 per cent of the amount invested in power generation should be invested in transmission, in India this figure stands at a mere 30 per cent, the report added.

With the future investments in the sector planned to be of the order of $75 billion for the two Five Year Plans (from 2012-2022) the investments in the transmission sector certainly need to be jacked up significantly, the report added.

The investment required in the power transmission sector is about $35 billion, out of which about $19 billion is planned to come from Power Grid Corp. The remaining $16 billion would have to be secured from private players, the report said.

Earlier, this week, Power Minister Jyotiraditya Scindia said that POSOCO (Power System Operation Corporation Limited), the wholly-owned subsidiary of state-run Power Grid Corporation, will be hived off from the parent company.

He said that in a bid to encourage private sector participation in the power transmission sector there is a need for regulator and POSOCO, post separation, will act as an independent electricity transmission grid regulator.