pgcil: PowerGrid obtains a contract without a tender process irritates private companies

Private power transmission companies are upset over the government’s decision to award a Rs 18,500 crore power transmission contract from Leh to Haryana to state-owned Power Grid Corp (PGCIL) without launching a contract. call for tenders. The proposed transmission line is the largest of the established green power corridors in the country and is being considered by all major transmission players.

The chief executive of the Electric Power Transmission Association (EPTA), Vijay Chibber, said that the private sector wanted to participate in the Leh project, but the government awarded it under the regulated tariff mechanism ( RTM) to PGCIL. Private companies believe that PGCIL will automatically gain an advantage when the Phase II of the project is launched.

A senior government official said that due to its strategic location, the project requires huge coordination with many government agencies such as the Border Roads Organization. “It’s a very thoughtful decision. The project is in a very strategic location and can face a lot of uncertainties,” he said.

Chibber said there are already projects set up by the private sector in difficult places like Arunachal Pradesh, Assam, Tripura and the Himalayan range of Pir Panjal. “The projects are not implemented by PGCIL, but by contractors, which are the same for the private sector,” he said.

He said the Leh project is becoming important as it accounts for almost a third of the total annual amount spent in the power transmission sector which is around Rs 50,000-60,000 crore. “This project is creme-belle-creme in terms of volume and size. The envisaged investment of Rs 18,500 crore is only phase I of the project. And there is going to be a phase II. Such a huge project of 480 km could have been split into 3-4 packages,” he said.

Since August 12 last year, EPTA has made representations to numerous ministries against the award of the nominated project, a day after PGCIL announced during an investor call that the Leh project would be assigned to him. But the association received no response, Chibber said.

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