The world’s second-largest power transmission utility, Power Grid Corporation, is set to buck the trend of companies slowing down their investment plans in wake of the sluggish economic environment. The state-run entity plans to increase the capital expenditure for the 12th Plan by 20% to R1,20,000 crore to complete a flurry of projects, including the ambitious green transmission corridor and development of transmission networks under the joint venture route.
A top company official told FE that Power Grid has already evaluated the projects in hand at the board level and has taken its sanction for stepping up 12th Plan capex from R1,00,000 crore to between R1,10,000 crore and R1,20,000 crore. The increase comes at a time when several other infrastructure sector companies are reviewing their projects and cutting down investments.
“There is a pick-up of activity in the power generation sector and consequently a lot of transmission projects have also come our way. We initially thought this could be managed with our earlier planned investment, but it has to be revised upwards. Even for current fiscal, we are thinking of increasing planned investment from the R22,500-crore level,” said the official asking not to be named.'
So far in the 12th Plan, Power Grid has invested close to R28,000 crore and may end the year with total investment in the Plan increasing to about R45,000 crore.
The company’s capital investment targets have fallen short as it recently won two transmission projects under the new tariff-based bidding model. Besides, it has signed two joint venture agreements with utilities in Orissa and Bihar and is planning to ink another with the railways for development of a transmission network.
In addition, the company is likely to invest R6,000-7,000 crore over the next four years for development of a green corridor to be used for transmitting electricity generated by wind and solar power projects, and spend another R5,000 crore for providing reactive management technology that adjusts frequency on a line automatically. A substantial part of the investment (R66,000-70,000 crore) will go towards building high-capacity transmission corridors for support of a cluster