The government has put off its earlier plans to allow the entry of the private sector in setting up of associated transmission systems — electrical lines that carry power from its source to the national grid — for ultra mega power projects (UMPPs).
The Power Ministry has decided that the transmission lines for first five UMPPs should be undertaken by state-controlled Power Grid Corporation of India Ltd (PGCIL).
These five UMPPs are the Sasan power project at Madhya Pradesh, Mundra in Gujarat, Krishnapatnam in Andhra Pradesh, Tilaya in Jharkhand and Cheyyur in Tamil Nadu.
“Transmission systems for UMPPs are complex projects involving simultaneous construction in a number of states,” a senior power ministry official told Hindustan Times.
“Private sector in transmission sector is still at a incipient stage unlike the transmission sector. They not only require large investment but also substantial managerial experience and other capabilities.”
At an average cost of Rs 5,000 crore for the transmission system for each UMPP, the funds requirements add up to Rs 25,000 crore.
While Power Grid was earlier asked to execute the transmission systems for Sasan, Mundra and Krishnapatnam UMPPs, the work for laying transmission lines for the other two UMPPs — Tilaya at Jharkhand and the upcoming Cheyyur at Tamil Nadu — were proposed to be taken up through the private sector route.
But now, all the five UMPPs have been kept under Power Grid’s services.
Power Grid’s chairman and managing director, S K Chaturvedi confirmed that the ministry has asked the corporation to execute the transmission systems.
Asked about the financial preparedness of Power Grid to implement these projects, Chaturvedi said the company is close to tying up a $2 billion in credit from the World Bank and the Asian Development Bank.