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Indo-ASEAN free trade agreement PowerGrid bullish on cross-border trading

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Our Bureau

Kolkata, Dec. 23

POWERGRID Corporation of India Ltd (PGCIL) is finding renewed hope of cross-country power transmission in the proposed Indo-ASEAN free trade agreement (FTA).

The corporation had previously mooted cross-country transmission network for power barter with Pakistan and Bangladesh in 1998.

Both the proposals, however, were later dropped because of political opposition in some countries.

India currently has a cross-country transmission network only with Bhutan and is also the largest investor in that country's power sector.

The transmission network is used to import power from the Himalayan kingdom.

"International power trading is very much a possibility," Mr R.P. Singh, Chairman of PGCIL, told Business Line when asked whether the proposed FTA between India and ASEAN countries would pave the way for international transmission.

"We are very positive about it. I am sure power will soon be an internationally traded commodity in the sub-continent."

Mr Singh, however, did not sound optimistic about the possibility of reviving the proposed transmission arrangement with Bangladesh in the foreseeable future.

On further expansion of grid capacity in India, he said that the company had set a target of expanding the inter-regional grid capacity from the existing 9500 MW to 37,200 MW by the end of the 11th Plan in 2012.

The project will require a total investment of Rs 71,000 crore, 20-25 per cent of which would be raised through private participation.

To finance PGCIL's share of investments, the company plans to enhance its exposure to borrowings.

"PGCIL currently has a debt-equity ratio of 61:39 against the Central Electricity Authority's prescribed ratio of 70:30 for transmission projects. We may, therefore, leverage the nine percentage point margin for raising resources, in addition to the regular borrowings and internal accrual," Mr Singh said.

The grid capacity will increase to 11,500 MW in this fiscal with the commissioning of Tala (Bhutan)-Delhi transmission network by the Tala Delhi Transmission Ltd (TDTL).

TDTL is a joint venture between the Tata group (51 per cent) and PGCIL (49 per cent).

`Grid stability better now'

KOLKATA: Modernisation of load despatch centres and revamping of countrywide power transmission network have brought about an improvement in grid stability. Grid disturbances, which were a common cause of power failure till two years back, are a thing of the past.

According to Mr R.P. Singh, Chairman of PGCIL, "there was not a single instance of grid disturbances, major or minor, till date in 2005-06".

In fact, during past two years, there were no major disturbances. In 2003-04 and 2004-05, the grid was subject to only seven and two minor disturbances respectively.

The figures look impressive when compared with 77 (74 minor and three major) cases of disturbances in 2001-02 and 57 (53 minor and four major) disturbances in 2002-03.

(This article was published in the Business Line print edition dated December 24, 2005)
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