China power major eyes transmission projects in India, sets alarm bells ringing

The country's grid managers have been forced to look at rewriting rules in the country's power transmission business, following a formal move by the State Grid Corporation of China (SGCC) to set up base in India.

The government-owned Chinese firm — the world's largest electrical utility and ranked seventh in the 2011 Fortune Global 500 list of the largest global companies by revenue — has already conducted a preliminary recce for a transmission link project in the country. It has also put in a bid for another corridor through the competitive bidding route.

Current rules provide foreign players unfettered access in the strategic transmission sector. The show of interest by the China firm, however, has prompted calls for a rethink, according to government officials involved in the management of the Indian grid. Internationally, most countries do not allow foreign participation in their grid networks.

Currently 100 per cent FDI is allowed through the automatic route in the power sector in India, including transmission. A couple of players from Spain already have a presence.

The worry with the Chinese firm is more to do from the strategic viewpoint. While the Beijing-headquartered grid major is still to bag a project in India, it had been technically disqualified for the only section where it put in a bid in March this year (the Rs 1,400-crore 765-kV Vemagiri-Hyderabad package) as the information format submitted by it was deemed "incomplete".

In its meetings with top central government officials here, SGCC has indicated that apart from bidding for corridors, it is keen on outright purchase of grid operations, if sections are on offer.

Re-look at rules

* SGCC is among world's largest electrical utilities

* Has conducted preliminary recce for a transmission link project

* Foreign players currently have unfettered access in transmission sector

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