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Competition in power projects

Union Power Ministry will soon set up an empowered committee to encourage competition in development of transmission projects and determination of tariff through a competitive bidding process for transmission of electricity.

india Updated: May 03, 2006 02:35 IST

Union Power Ministry will soon set up an empowered committee to encourage competition in development of transmission projects and determination of tariff through a competitive bidding process for transmission of electricity.

The empowered committee will be chaired by a member of Central Electricity Regulatory Commission (CERC), to be nominated by its chairman. It will have member, power systems and member, economic and commercial (E&C) of the Central Electricity Authority (CEA). The committee will also have representatives from the Ministry of Power, Planning Commission, central transmission utility (CTU) and two experts from the power sector to be nominated by the Ministry of Power.

This committee will identify projects under the special scheme to develop transmission projects, to facilitate preparation of bid document and invitation of bid through a suitable agency, and evaluation of bids. The committee will also facilitate finalisation and signing of transmission service agreement between the developer and the concerned utilities. CEA will provide the secretarial assistance for the empowered committee.

A senior Power Ministry official said that to maintain transparency and impartiality, the CTU member in the empowered committee would not take part in the selection of the developer in those cases where CTU is one of the bidders.

Sources in Power Ministry said, “To facilitate smooth and rapid development of transmission capacity in the country as envisaged in the National Electricity Policy, some transmission projects will be identified for tariff-based competitive bidding, in which private investors and transmission utilities both central and state, can participate.”

A set of guidelines for private sector participation in transmission was first issued in 2000, however, following the implementation of National Electricity Policy 2003, a need for fresh guidelines was felt. The new guidelines will be reviewed with the ultimate aim of developing all transmission projects in an efficient economical manner.