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While the government boasts of surplus power, a challenge yet to be addressed is building transmission infrastructure under a conducive business environment.
Crying foul over the bias being shown towards Power Grid Corporation of India Ltd (PGCIL) for building transmission network, the private players are knocking at the doors of the Prime Minister’s Office.
The private sector players have sought reconstitution of the National Committee on Transmission to accord a level-playing field for them. The NCT has been tasked to constitute the Bid Evaluation Committee (BEC) for a Tariff-Based Competitive Bidding Projects besides other mandates.
In a representation to the Centre, industry bodies allege that presence of the Chief Operating Officer of PGCIL on the NCT gives an unfair advantage to the Central transmission utility in these projects.
“This is an anomaly in the NCT. PGCIL regularly competes for developing transmission projects. The presence of a PGCIL representative on the NCT surely gives it an unfair advantage,” a private sector transmission company representative said.
The apprehension of private companies intensified after the 37th meeting of Empowered Committee (EC) on Transmission approved the allocation of 5 transmission schemes to PGCIL under the regulated tariff mechanism. “This undoes reforms achieved in transmission in the last 12 years since the release of Tariff Policy in 2006,” the private company officials said.
“Adequate inter- and intra-state transmission is the need of the hour to ensure 24x7 quality and reliable power supply to all. To ensure that transmission costs are kept low, the contracts need to be awarded on a competitive basis. The NCT should eschew the tendency of awarding contracts on cost plus basis award as it leads to perverse incentive to increase cost,” Director-General, Association of Power Producers (APP), Ashok Kumar Khurana, said.
“In its recent Tariff Approach Paper, the Central Electricity Regulatory Commission estimates that the cost of inter-State power transmission has increased 69 per cent in the past seven years. Undoubtedly this is a direct consequence of projects being awarded under regulated and not competitive bidding model,” another company official said.
“The onus on the government is to continue its effort that has resulted in competition and apply the same to the transmission sector,” he added.
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