Greater thrust on PPP in power and transport
} Poonam Singh
A major breakthrough by the ministry of power in implementing transmission
projects on public-private partnership (PPP) basis has been welcomed by the
private sector. Infrastructure players like RPG Transmission, Reliance Energy,
Tata Power, GMR Energy, Essar Power and Jaiprakash Associates have shown
interest in this initiative by attending the bidders' confe1rence for inviting
private sector participation in transmission projects.
The country is building a national grid which has reached an inter-regional
transmission capacity of 11,500 mw and is likely to touch 16,000 mw within a few
months, Union Power Minister Sushil Kumar Shinde said during the conference. The
minister disclosed that the regional transmission capacity of the national grid
would be more than 37,000 mw by 2012.
Shailesh Joshi, President, Energy Division, Feedback Ventures Ltd, says, "As per
estimates for such development an investment of Rs 70,000 crore is needed to
achieve these capacity targets. Power Grid Corporation of India neither has such
resources at its disposal nor has the implementation capability to
simultaneously undertake such a development. It is from this perspective that
private sector investment is being solicited."
Since the ministry has made rural electrification its thrust, it will throw open
big opportunities for the sector. According to Amitabh Mundhra, Director,
Simplex Infrastructure Ltd, "While the state power transmission bodies are
focusing and funding rural electrification projects which are not commercially
viable, the PPP model on the main grid line would ease financial pressure on
rural electrification or minor electrification programmes."
There is great dearth of connectivity in terms of power, feels Mundhra. There
are pockets where there is enough power, but evacuation is a problem because the
connectivity is overloaded. "The network has to be put in place as quickly as
the projects so that power can be evacuated by them effectively," he says.
"The advantages of private sector participation lie in efficient implementation
of capital projects as well as their operation and maintenance during the
concession period. These efficiencies should reflect in better quality and
reliability of the system and possibly cheaper tariffs," says S. Ramachandran,
President, Business Development, IVRCL Infrastructure & Projects Ltd. "Our power
division is growing at a feverish pace and if we bag some transmission orders we
should be able to sustain our company growth over a longer period of time."
"The opportunity for capacity addition and growth for manufacturers in the
transmission equipment industry will meet the huge domestic demand," feels
Ashish Jhunjhunwala, Director (Exports), Rashtraudhyog Ltd. Due to strict
qualification requirements, there are only a few companies that can actually bid
for projects implemented by Power Grid. "But, this gives an opportunity for
manufacturers like us to be a part of this tremendous growth and be a 'partner'
with big ger players right from the tender stage and have agreements to supply
materials to them for their projects," Jhunjhunwala adds.
So far 14 projects have been announced on PPP basis which include 1,000 mw at
Maithon, 1,000 mw at Kodarma and 500 mw at Bokaro.
} Shakti S. Singh
The need of the hour is to not only study where investments can be made, but
also how sustainable and commercially viable they will be, said Gajendra Haldea,
Advisor to the Deputy Chairman of the Planning Commission.
To overcome the infrastructure deficit and meet the nine per cent growth rate in
the 11th Plan (2007-2012), the Planning Commission has suggested an increase in
investment from 4.6 per cent of GDP to between seven to eight per cent of GDP.
This would entail an outlay of $350 billion during the 11th Plan.
The government is now planning to meet its targets through a renewed thrust on
the public-private partnership (PPP) model in infrastructure projects,
especially building roads and highways, power, and modernisation of ports,
airports and railways.
[22 January 2007]