Addressing a news conference in the capital, the chairman and managing director, PowerGrid, RP Singh said that talks with overseas agencies like ADB and the World Bank are going on for funding its transmission projects and the feelers coming from these agencies clearly indicate that embargo on loans and aid on new power projects would not last beyond December this year."Even if status quo is maintained by the US and other countries regarding sanctions, the existing projects of PowerGrid would not be affected. For the new projects, the public sector mini ratna has already formulated a contingency plan," Singh said.

The plan includes raising of funds from foreign lenders, domestic financial institutions as well as tapping public borrowings. However, he refused to divulge details on the definite source of the funds.

In addition to this, Singh said, Power Grid will pick up equity in the proposed power trading corporation (PTC) on a `non-recourse' basis so as to avoid any liability in its balance sheet.

He said the corporation plans to buy shares of PTC and would go for non-recourse financing that would not effect its balance sheet and the day to day operations. Through this route the investment by PowerGrid need not be reflected as liability in its balance sheet and the money could be deployed from its reserves.

By doing so PowerGrid will also adhere to the covenants laid by the multilateral agencies and banks, which restricts it to enter the trading business.

It may be noted here that the government had mooted the concept of power trading corporation with equity participation from national thermal power corporation, power Finance corporation and PowerGrid for sale of bulk power within the country and abroad. Singh said that PopwerGrid would facilitate formation of the PTC which would also act as a catalyst in encouraging private investment.

Talking about the corporation's performance during the first quarter of the current fiscal, he said that PowerGrid had posted a gross profit of Rs 100 crore and its turnover during 1997-98 was Rs 1434.68 crore.

Singh said the Transmission Bill passed recently authorises PowerGrid to play the pivotal role in facilitating private investment in the transmission sector.

Power Grid, he said, is also formulating a plan to attract private investment in setting up of transmission lines. It is identifying locations which will be attractive for the private sector participation. The focus is on the areas where the terrain is easy and the investment requirement is at least Rs 300 crore.

The corporation may either select a transmission project and join hands with the private player to execute the same or may even take equity participation in those projects, he added.

On PowerGrid's plan to diversify into telecom sector, he said an international consultant would be appointed soon to advise the corporation which would be in a position to operate in this new area in about two years time.

Stating that Power Grid had got the status of a central utility, Singh said the corporation had envisaged a total investment of Rs 1,750 crore for the current financial year. On setting up of the SAARC grid, Singh said that members states have agreed in principle to that proposal. At a recent meeting in Dhaka, all the nations appreciated the idea, but have added many IFS and but about the proposed grid. Bangladesh would soon start dialogue with PowerGrid for inter-connection.

On setting up of the national grid, Singh said inter-regional transfer lines which can carry 5000 to 6000mw would be established by 2002-2003 and another 10,000mw by next three years. The lines which can carry 30,000mw would be set up by another five years.