The Uttar Pradesh government is set to take over the private transmission utility South East UP Power Transmission Company Ltd (SEUPPTCL) that operates a 765kV transmission utility in the northern state.
Speaking to the media at a recent press conference Rajeev Sharma, Chairman & Managing Director, Power Finance Corporation Ltd, said that talks are in advanced stage with Uttar Pradesh government for the takeover of SEUPPTCL by state power transmission company Uttar Pradesh Power Transmission Corporation Ltd. PFC, it may be mentioned, is a major lender to the project with an estimated exposure of Rs.2,400 crore.
SEUPPTCL, incorporated in September 2009, has signed a transmission service agreement with four distribution companies in Uttar Pradesh to erect, commission and operate 765kV single-circuit Mainpuri-Bara Line with 765kV/400kV in Mainpuri. The transmission network is around 1,600km in length with five substations. SEUPPTCL is promoted by Spanish company Isolux Corsan.
Giving details on this project, Sharma said that the reason for this takeover is that the parent company Isolux Corsan has filed for bankruptcy in Spain. The transmission project is over 70 per cent complete and the completed portion has already been pressed in commercial operation. Though the project features amongst assets in the “resolution process” in PFC’s books, the institution has not yet declared the project as a non-performing asset (NPA). PFC is hopeful that the project will be taken over by the Uttar Pradesh government. The project is critical for evacuation from several thermal power projects in and around Uttar Pradesh. “We are in advanced stage of discussion with evaluation agencies and they (agencies) have submitted their report.”
PFC has a total loan asset book of around Rs.2.79 trillion, out of which 6-7 per cent is accounted for by the power transmission sector, Rajeev Sharma said. These projects are mainly in the intrastate power transmission space.
Mahan turns NPA
Rajeev Sharma also mentioned that the Mahan transmission project of Essar Power Transmission Ltd, on the other hand, has been declared as NPA. The resolution plan for this project is underway, Sharma said, without divulging details. Essar Power Transmission, a subsidiary of Essar Power Ltd, is constructing the 400kV double circuit Mahan-Sipat line spanning 337 km, straddling Madhya Pradesh and Chhattisgarh. The line will evacuate power from Essar Power’s 1,200-mw Mahan coal-based power project in Madhya Pradesh.
Upbeat on power transmission
Another senior PFC official told T&D India that PFC’s exposure to the power transmission sector would grow in the coming years, but the focus would continue to be on intrastate power projects, especially those being bid under the tariff-based competitive bidding (TBCB) route.
PFC, through its wholly-owned subsidiary, PFC Consulting Ltd, is also the nodal agency for interregional power transmission lines awarded under the BOOM model, using the TBCB route. The power ministry has so far awarded 41 such independent power transmission projects out of which PFC has been the nodal agency (bid process coordinator) for 18. Rural Electrification Corporation, through its wholly-owned subsidiary, has been involved in the remaining projects as the only other nodal agency.
