The Hindu Business Line : CERC rejects Reliance Energy plan to execute transmission project

THE Central Electricity Regulatory Commission (CERC) has rejected the application of Reliance Energy Transmission Ltd for a licence to undertake construction of 20 transmission lines and 13 sub-stations in the western region.

The company had approached the power regulator last year seeking the licence, a move that was firmly opposed by Power Grid Corporation of India Ltd (PGCIL).

PGCIL, which has been designated as the central transmission utility, had opposed the application on the grounds that it had already started work on the lines that are part of the Western Region Strengthening Scheme, envisaging an investment of over Rs 4,700 crore.

In its order, the CERC, while rejecting the Reliance Energy application, has divided the western region scheme into four packages.

PGCIL would be executing two packages (A and D), involving construction of 765 KV and 400 KV lines by 2008-09, either by itself or through the joint venture route.

The other two packages (B and C) are to be fully executed by private players on the basis of competitive bidding.

PGCIL planned to execute the project through the joint venture route, with the private partner holding 51-74 per cent equity.

The project involves construction of 800 circuit km (ckm) of 765 KV lines, 6,300 ckm of 400 KV lines, augmentation of 17 existing sub-stations, and setting up of four new sub-stations.

Reliance Energy, on the other hand, had proposed to implement the scheme by itself.

As this is the first such case involving opening up the power transmission sector for private participation, the regulator had sought suggestions and comments from other stakeholders including the Power Ministry, the Central Electricity Authority (CEA), the beneficiary States and PGCIL.

While PGCIL opposed granting a licence to Reliance Energy, the CEA suggested that as the scheme entailed construction of 765 KV and 400 KV lines, it would not be desirable to entrust implementation of the entire scheme to a new entrant like Reliance Energy.

The Power Ministry, which was asked by the commission to finalise the transmission guidelines, in its reply left the matter open-ended and fixed no timeframe for coming up with the guidelines following which the Commission decided to issue the order.

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