PowerGrid, L&T among 7 in race for AP transmission project

Suresh P. Iyengar Mumbai | Updated on November 15, 2017


REC may decide on winning bid for Rs 3,000-cr projects by mid-March

Rural Electrification Corporation has received financial bids from seven infrastructure companies for laying transmission line to connect two power projects in Andhra Pradesh with the central grid.

REC is expected to decide on the winning bid for the two projects cumulatively worth Rs 3,000 crore by mid-March.

The companies that have shown interest in the transmission project are PowerGrid Corporation, Larsen and Toubro, Sterlite Grid, IVRCL, NCC Infrastructure Holding, Ind Bharath Power Gencom and Megha engineering consortium and Elecnor and KEC Intl consortium.

The build, operate, own and maintain project involves erecting 100 metres tall 765 kV D/C towers to evacuate power across the Godhavari river. Besides, the region is constantly prone to storm and cyclone, said an official of a transmission company that is in fray for the project.

Factors on Costing

Arriving at exact cost of such projects requires huge investment and much due diligence. Applying the conventional method for arriving at cost can lead to surprises during project execution. Moreover, these line travels through the disputed Telangana region, which can pose its own challenges, he said.

Lack of data on wind speed in these regions has been a major drawback for transmission companies bidding for the project.

“We need at least 50 years data on wind speed in these regions to arrive at a cost considering that the transmission towers have to be used for next 30 years or so. Moreover, fluctuating aluminium and steel prices may also spring up some surprise,” said a spokesperson of Sterlite Group.

The Government had recently allowed private investment in power transmission infrastructure opening up an investment opportunity of Rs 2 lakh crore.

Last week, Power Finance Corporation had received only five bids from 22 qualified parties for a similar project in Tamil Nadu and Karnataka.

The Government has awarded six power transmission projects under the tariff-based bidding model of which three was bagged by Sterlite Grid, a subsidiary of Sterlite Technologies and two by Reliance Infrastructure.

Currently, Power Grid Corporation of India owns and operates about 45 per cent of inter-State transmission system.

“Power transmission infrastructure business calls for deep pockets as large investments have to be made even before the project is bagged. Companies have to survey the entire area where the lines are laid.

There are also no provisions to pass on cost escalation,” said an analyst.


Published on February 17, 2012

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