The Hindu Business Line : Bina-Nagda-Dehgam transmission lines — CERC directs PowerGrid to bear escalated cost

THE Central Electricity Regulatory Commission (CERC) has come down heavily on PowerGrid Corporation of India Ltd (PGCIL), directing it to execute a transmission link at a "benchmark cost" suggested earlier by the utility, which formed the basis for the rejection of a proposal by a private consortium that was to originally execute the project.

Subsequently, even as PGCIL revised the execution cost beyond its own initial estimates, CERC has now ordered the Corporation to implement the project at the cost suggested by it earlier.

The project dates back to early 2003, with PGCIL identifying the Bina-Nagda-Dehgam (Madhya Pradesh) transmission lines, aimed at evacuation of power from National Thermal Power Corporation's Sipat power station, for implementation of the project through the Independent Power Transmission Company route.

A consortium of Tenega Nasional Berhad, Malaysia (TNB) and Kalpataru Power Transmission Ltd was the sole party that made a techno-commercial and tariff proposal. The combine, subsequently, applied to the CERC (which decides on all inter-State projects) for a transmission licence for executing the link at a final cost of Rs 657 crore.

When the case came up for hearing, PGCIL, in its capacity as the Central Transmission Utility, advised the CERC that the total cost of the project would be only around Rs 557 crore, and in any case the cost should not exceed Rs 617 crore.

In light of the private consortium's cost being higher than the benchmark cost suggested by PGCIL, the regulator rejected the TNB-Kalpataru proposal. PGCIL was, instead, asked by CERC to execute the project at a total cost "not exceeding" Rs 617 crore, as was suggested by the utility.

Subsequently, PGCIL has submitted to the CERC that it would be able to execute the project at a cost of over Rs 675 crore, which is subject to further escalation.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page