In a significant development, the Central Electricity Regulatory Commission (CERC) has cleared the Reliance Energy Transmission Ltd?s (RETL, a subsidiary of Reliance Energy Ltd) transmission project with an investment of Rs 2,000 crore in the western region.
This is the first project approved by the CERC to be solely carried out by the private player on build, own and operate (BOO) basis and also on the competitve bidding based on transmission tariff commitment for life of the period.
The year wise tariff has been committed for 22 years after commissioning. CERC?s order would givethe much needed boost for 14 other transmission systems which have been identified by the power ministry for construction through private sector participation.
The project awarded to RETL is a part of the Rs 5,000 crore, western region system strengthening system originally proposed by the state-run PowerGrid Corporation of India Ltd. The project includes setting up of 400 kV double circuit (DC) lines in the state of Maharashtra, Gujarat and Madhya Pradesh.
CERC?s move comes after the power ministry has accepted the recommendations made by AK Khurana committee. As reported by FE, the committee recommended that as far as ?buy out? provisions during construction of a transmission line and operation and maintenance (O&M) is concerned, the construction risk would be taken solely by the developer of the transmission line and the lender/financial institutions. Section 19 to 24 of Electricity Act deals with revocation of license and other actions that the appropriate commission is competent and required to take.
CERC made it clear that there was no need for retendering after the deletion of ?buy out? provisions from the original tender.
The CERC also accepted the power ministry?s suggestion that since no relaxation from the notified conditions was being made, and only a hardening of the contract conditions for the L1 bidder would take place by removal of the ?buy out? provision, retendering would not be needed. CERC asked the RETL to proceed further expeditiously with finalisation of implementation agreement and power transmission agreement.
The payment security mechanism can be worked out before the project gets commissioned.