Thanks to the tariff-based competitive bidding (TBCB) framework, power transmission development is emerging as a key area for EPC players in the infrastructure space, to groom into developers.
In recent years, EPC players, particularly those in the roadways sector, have shown keen inclination towards power transmission development, thanks to the TBCB modality. The list is growing – Megha Engineering & Infrastructures Ltd, G R Infraprojects Ltd, Dineshchandra R. Agrawal Infracon Pvt Ltd, H.G. Infra Engineering Ltd, Shivalaya Construction Ltd and Dilip Buildcon, to name a few.
Power transmission development is largely about project financing, management and execution. Experienced EPC players are inherently adept at project management and execution. Now, when it comes to project financing, the roadway sector has already offered them experience with through BOT (build, own and transfer) and HAM (hybrid annuity model) concessions.
Therefore, roadway EPC players are perhaps the best candidates for power transmission development. Adding to their qualification is the fact that these EPC players also have immense understanding and resolution capability with respect to land acquisition and securing right-of-way.
For larger EPC players, interstate transmission system (ISTS) projects can be a great opportunity. Even here, a choice can be made between medium and large projects. For medium-sized players, the intrastate transmission system (InSTS) landscape offers tremendous scope. Moreover, intrastate schemes can easily attract local players that are already familiar with the state’s geography, topology and policy framework.
The good news here is that states like Maharashtra, Karnataka and Rajasthan have formulated policies where intrastate schemes beyond a threshold value (averaging Rs.250 crore) will necessarily be developed under the TBCB framework, subject to conditions. More states are expected to follow. States are also engaging the services of seasoned bid process coordinators like PFC Consulting Ltd (PFCCL) and REC Power Development & Consultancy Ltd (RECPDCL) to ensure a smooth and efficient bidding process.
The entry of state power transmission service providers (state transmission utilities) as bidders for intrastate projects under the TBCB mechanism, is adding a new dimension to competition. Maharashtra State Electricity Transmission Corporation Ltd (MSETCL) has already started bidding for intrastate schemes, and its Rajasthan counterpart has also firmed up similar plans. (Also see: Revisiting the CTUIL case, at the state level)
Industry observers feel that the power transmission development space will see significant expansion in the developer fraternity, much like what has happened in solar power, and more recently in battery energy storage system (BESS) projects.
It is now up to the state governments and regulators to ensure that the policy framework with respect to land acquisition, signing of transmission service agreements, securing transmission licences, etc, is robust enough to sustain, and even attract more private enterprise.
The author of this article, Venugopal Pillai, is Editor, T&D India (www.tndindia.com) and may be reached on venugopal.pillai@tndindia.com. Views expressed here are personal.