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Swift development of Transmission infrastructure in India: The Joint Venture route

Last Updated: 31 January 2017

Issues with Indian Transmission sector:

Installed generation capacity in India has nearly doubled in the recent times, mainly because of restructuring and deregulation of the power sector and the thrust given to Renewable energy sources. But the transmission sector is way lagging behind the generation, as the former was not given the due consideration. 

Some of the major obstacles in the development of transmission infrastructure in the country has been the difficulty in acquiring land, delayed forest clearances, and the government monopoly. 

Transmission unavailability has resulted in major load-sheddings in various areas, despite of surplus energy in certain regions. This has led to unsold generation capacity, low market prices and low plant load factor.
“The Electricity Laws (Amendment) Act 1998” treats transmission as a distinct activity in India and has made provisions for private sector investment in transmission system. In order to activate resources from private sector, Government of India issued certain guidelines for private sector participation in transmission sector in the year 2000. 

Methods envisaged for private sector participation in Indian Transmission sector:

One of the methods envisaged for private sector participation in transmission was through Joint Venture, wherein the Central/State Transmission Utilities (CTU/STU) shall own at least 26% equity and the balance shall be contributed by the Joint Venture Partner. 

The second route was all the way through Independent Private Transmission Company (IPTC), wherein 100% equity shall be owned by the private body. The CTU/STU will do the planning and identify approved transmission system or part thereof for implementation and execution by the private sector. 

Ministry of Power has also initiated Tariff Based Competitive Bidding Process for development and strengthening of Transmission system through private sector participation.

The aim is speedy development of transmission infrastructure in India, and to bring in potential investors. Since the power demand is increasing at a faster rate, gestation period of generating plants are reducing now it’s time for the transmission sector in the country to ramp up.

As a pilot project on JV method, Powerlinks Transmission Ltd., a joint venture between the Tata Power Company Ltd. (51%) and Power Grid Corp. of India Ltd. (49%) was selected through International Competitive bidding for the execution of 400 kV D/C transmission line associated with Tala Hydro Project, costing about a thousand plus Crores. The transmission project with a route length of around 1166 km connects Siliguri (West Bengal) and Mandola (Uttar Pradesh). This project which is in operation since 2006 has opened up Public-Private Partnership (PPP) in the transmission sector in India. Success achieved under JV route of private participation has encouraged POWERGRID to identify many more projects under this route.