The PGCIL board, which met here recently, had approved the proposal for joining hands with BPL to bid for the telecom project of MSEB, chairman and managing director of the transmission utility, RP Singh told PTI.

In case the consortium bags the contract, it would enter into a joint venture with MSEB under which the former would have a majority 60 per cent stake, Singh said.

Stating that this was the maiden entry of PGCIL for any telecom project as an operator through the bidding route, he said that optical fibre network available in the transmission lines would be used for telecom purpose.

The corporation as part of its diversification plan had already decided to enter the lucrative telecom sector as a national long distance operator, he said.

PGCIL would soon take a proposal based on recommendations of its international consultant IVO Finland to the board for approving its entry into the telecom sector through formation of a joint venture company, he said.

The joint venture partner would be selected on the international competitive bidding route, Singh said and clarified that joint venture with BPL was only project specific.

Meanwhile, corporation sources said PGCIL had already made presentations in the power ministry about the company's plan to foray into the telecom sector as a NLDO.

The corproation had already decided to go for NLDO on the lines of DoT, Singh said adding the new company would require an investment to the tune of Rs 2,500 crore.

PGCIL would have a 26 per cent stake in the telecom company with the private sector having a majority stake, he said.

The corporation would have to extend the transmission lines by another 6,000 kilomtres in three years for setting up a separate joint venture.

Company sources said some of the telecom majors including MTNL, VSNL and a private telecom player BPL, have evinced interest in joining hands with Powergrid to set up a separate joint venture company for telecom business.

Powergrid, the only transmission utility in the country, would use the optical fibre network available through its transmission lines to enter the telecom services.

Powergrid had already entered into a strategic alliance with VSNL and BPL to lease its capacities and the move to enter into the telecom sector as a long term player was part of the company's diversification plan.