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Anil Sasi

New Delhi , Aug. 10

THE Central Electricity Regulatory Commission (CERC) has turned down a revised petition filed by the state-owned Power Grid Corporation of India Ltd (PGCIL) seeking ratification of higher cost estimates for a transmission project in Madhya Pradesh.

Against the Rs 617 crore sanctioned by the regulator for the Bina-Nagda-Dehgam transmission line project, PGCIL has sought Rs 686.32, citing increased steel prices and other raw materials. The regulator has, however, allowed the utility to pass on any cost escalation arising out of interest rate fluctuations to the tariffs.

CERC had earlier come down heavily on PGCIL, directing it to execute the transmission link at a "benchmark cost" suggested by it earlier, which had formed the basis for rejecting a proposal from a private consortium. The project dates back to early-2003, with PGCIL identifying the Bina-Nagda-Dehgam transmission link to evacuate power from National Thermal Power Corporation's Sipat power station, for implementation through the Independent Power Transmission Company route.

A consortium of Tenega Nasional Berhad (TNB), Malaysia, and Kalpataru Power Transmission Ltd made a techno-commercial and tariff proposal.

The combine, subsequently, applied to CERC (which decides on all inter-State projects) for a transmission licence to execute 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 was around Rs 557 crore, and could not exceed Rs 617 crore.

The TNB-Kalpataru proposal was rejected and PGCIL was, instead, asked to execute the project.

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