Bid value for India power transmission projects halves

• 6 years ago (2017-07-10)
• David Flin

Asia 850 Transmission 181

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Despite India’s policy to support private sector investments in power transmission, the projects awarded under competitive bidding more than halved from $3.3 billion last year to $1.5 billion in FY17. Private firms are finding it difficult to access funds as lenders are not enthusiastic about the sector.

Currently, only 6.7 per cent of the transmission network is operated by private players, compared with the power generation sector where private firms contribute about 44 per cent of the power generation capacity.

The Federation of Indian Chamber of Commerce and Industry (FICCI) said that states are not showing signs of taking the bidding route, but are awarding transmission projects on a nomination basis. The amended national tariff policy of 2011 mandated tariff-based competitive bidding (TBCB) for all transmission projects after 2013. However, the revised policy in 2016 introduced a few conditions, such as projects of strategic importance and catering to an urgent situation, for exemption of inter-state transmission projects from TBCB.

Companies which have been awarded such projects to date include Adani Power, Essel Infraprojects, Sterlite Power, Kalpataru Power Transmission, Laresen & Toubro, Reliance Power, and Power Grid Corporation of India Ltd (PGCIL), the central transmission utility.