Rajasthan is adopting the viability gap funding (VGF) mechanism for awarding intrastate power transmission lines, moving away from the earlier BOOM (build, own, operate and maintain) mode.
Speaking to Projectmonitor from Jaipur, a senior official of Rajasthan Rajya Vidyut Prasaran Nigam Ltd said that one project involving setting up of a 90-km 400kV double-circuit line from Jhunjhunu to Jaipur (North) along with associated substations that was to come up on BOOM basis—under the special purpose vehicle Pink City Transmission Ltd—will now be developed under the DBFOT mechanism. The selection of bidders is currently underway and RfQs are being accepted up to June 29, 2015.
There are two other projects on DBFOT basis that Rajasthan is pursuing. The 400kV Bikaner-Sikar line running 169 km is on the verge of allotment. There are three bidders in the race that include Tata Projects and Essel Infraprojects, RVPNL officials said. The other project is the 142-km 400kV Suratgarh-Bikaner line for which RfQs are being sought.
Rajasthan has recorded sufficient progress in using the PPP model in setting up its power transmission infrastructure since rolling out the process in 2009-10. So far four projects have been awarded to private developers while the three discussed above are in process.
Two of the four projects awarded have in fact started commercial operations. These projects are the 400kV Bikaner-Deedwana-Ajmer line running 255 km and the 150-km 400kV Hinduan-Alwar line. These projects were awarded to the GMR Group under the BOOM model in September 2010. The respective special purpose vehicles for the two projects are Maru Transmission Service Ltd and Aravali Transmission Service Ltd. GMR Group has invested around `200 crore in these projects, and these projects mark the entry of the Hyderabad-headquartered group in the power transmission development space.
Mumbai-based Emco Group has been awarded two projects, both under the BOOM model. These projects include the 220kV Sikar-Nawalgarh-Jhunjhunu scheme to be developed by the special purpose vehicle Shekhawati Transmission Service Ltd. This project was awarded in February 2013. More recently, another project—the 400kV Jodhpur-Udaipur line—was also awarded to Emco, according to RVPNL officials. This project is being developed by a special purpose vehicle Lake City Transmission Ltd. For Emco that has constructed power transmission infrastructure as an EPC contractor, these two projects mark the debut of the company as a transmission service provider.
Private sector participation in intrastate power transmission has not picked up as desired. According to a Projectmonitor study, only five states have made demonstrable progress harnessing the PPP philosophy through various modalities like joint venture, BOOM, DBFOT etc. The states in question are Maharashtra, Haryana, Uttar Pradesh, Rajasthan and Madhya Pradesh. Based on their intent to invite private participation in intrastate power transmission, there are states like Gujarat and Tamil Nadu from whom some traction can be expected in the near future.
Rajasthan has been the most successful with a shelf of seven projects with four of these commissioned. Uttar Pradesh has had a mixed experience. After successfully awarding two large projects to private developers, the third failed to garner response. Power Grid Corporation of India has since taken over this project—the 765kV Lalitpur transmission scheme—on consultancy basis. A senior PGCIL official explained that the company will implement the project through subcontractors, on behalf of the Uttar Pradesh state power transmission utility.
India’s power transmission systems are moving to higher voltages entailing technical complexities. Most state power transmission utilities have been in financial losses and lack technical competence. Setting up modern and efficient intrastate power transmission infrastructure would therefore depend on how successful states are in eliciting private sector enterprise.