Govt plans National Grid to cut T&D losses

Govt plans National Grid to cut T&D losses
ENS ECONOMIC BUREAU

JAN 13: The Union government will soon set up a National Grid in a serious attempt to strengthen the transmission and distribution (T&D) network of the state electricity boards in the country. The state-run Power Grid Corporation of India Ltd (PGCIL) has been appointed as its notified transmission utility.

Union minister for power Suresh Prabhu told reporters at the sidelines of the launch of the 2,400 km optic fibre link between Mumbai and Delhi with a total bandwidth of 84 Gbps.

According to Prabhu, the National Grid would make it possible to set up power stations as per the availability of the fuel feedstock in the particular region, and also chalk out an efficient plan for distribution of power to other states.

The minister said that the investment for the improvement of transmission system all over India would be around Rs 80,000 crore and it would be raised through diversification, joint ventures (JVs), and floating bonds in the domestic and international market.

He said the power ministry was in talks with three international companies to participate in the joint ventures with PGCIL in this regard.

PGCIL chairman and managing director RP Singh said that its equity in the proposed venture would be restricted to 26 per cent (Rs 500 crore) in a bid to maintain the voting rights. "The JV company would work on providing the gateway and laying cables for increasing international connectivity," he added.

Singh said that the company has already got a credit of $250 million from the Asian Development Bank and Rs 120 million as additional commercial loans from financial institutions.

Expressing serious concern over the mounting T&D losses of state electricity boards, Prabhu said that the government has embarked upon an investment plan of Rs 40,000 crore, spanning three years. He added that a bill would be introduced, whereby a cognizable offence would be registered against those involved in power thefts and pilferage.

Prabhu announced that the Centre would allot Rs 2,000 crore under the Accelerated Power Development Programme (APDP) to all states on an annual basis, half of which has been sanctioned by the Cabinet and the rest would be leveraged by loans from the Power Finance Corporation or other financial institutions. He added that the Centre would also release Rs 9,000 crore in three years allocation under the tenth and eleventh plan schedule.

He reiterated that the Centre would sign a customised memorandum of understanding with 16 states for strengthening the distribution system which has been the core issue during the implementation of power sector reforms.

RP Singh said that it has a Rs 1,400 crore project to lay optic fibre covering 14,000 km in 56 cities. He added that the company would also invest nearly Rs 5,000 crore to provide services as national long distance operator in India.

Maharashtra minister for power Padmasinh Patil announced that the government had already formulated a right of way policy and said that the Maharashtra State Electricity Board has already awarded a contract for laying optic fibre through use of MSEB's transmission lines across the state. The Enron-led consortium comprising Global Telesystems which has bagged this contract has agreed to pay Rs 101 crore towards right of way and sign necessary agreement with MSEB by the end of this month.