The Hindu Business Line : PowerGrid inks pact with promoters of 5 projects

The state-owned Power Grid Corporation of India Ltd (PGCIL) on Thursday inked joint venture agreements with the promoters of five power projects for building transmission lines at a combined investment of Rs 5,300 crore.

The company signed MoUs with Oil and Natural Gas Corporation/IL&FS combine, Essar Power, Torrent Power, Jaiprakash Group and Teesta Urja Ltd for executing transmission projects associated with their generating stations with a combined generation capacity of 5,900 MW.

"This is the beginning of a new era in the transmission sector. The Government alone cannot invest the Rs 71,000 crore required in the transmission sector by 2012 and more private players should come," the Power Minister, Mr Sushil Kumar Shinde, said after the MoU signing ceremony.

Stake structure

The five projects involve the construction of 5,000-circuit km of transmission lines, six new sub-stations and upgrading five existing sub-stations. PGCIL will retain a minority 26 per cent stake and the respective developer would hold the balance in the joint venture. All the projects are likely to be executed at a debt-equity ratio of 70:30.

While ONGC/IL&FS is setting up a 1,100-MW gas-fired power plant in Tripura, Essar and Torrent are building a 1,500-MW and a 1,000-MW gas-based projects, respectively in Gujarat. The joint venture with Jaiprakash Group would be for its 1,000-MW Karcham Wangtoo project in Himachal Pradesh and with Teesta Urja Ltd for its 1,200-MW power plant in Sikkim.

First joint venture project

Mr Shinde said PGCIL's first joint venture (with Tata Power Company) for the 1,020-MW Tala hydroelectric project in Bhutan would be operational before June. The company, which is also in discussions with Reliance Energy for a joint venture, has conducted feasibility reports of these five projects.

The MoU signing would be followed by a formal joint venture agreement. The transmission project associated with ONGC/IL&FS generating station comprises 400 KV grid lines to be constructed at a cost of Rs 2,000 crore, while that with Teesta Urja entails a cost of Rs 1,500 crore.

The transmission system associated with Jaiprakash Group's power project would require an investment of Rs 750 crore, the Essar project would cost Rs 800 crore and Torrent Rs 250 crore.

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