Power Grid Corporation of India (PGCIL)’s order inflow of Rs.13,414 crore in FY20 was equally balanced between RTM (regulated tariff mechanism) and TBCB (tariff-based competitive bidding) power transmission projects.
According to an investor presentation of PGCIL, accompanying the annual results for FY20, the company witnessed a total order inflow of Rs.13,414 crore in FY20. Out of this, Rs.6,599 crore (or 49.2 per cent) came from TBCB projects while the remaining Rs.6,815 crore (or 50.8 per cent) came from RTM projects.
TBCB projects are those for which PGCIL needs to bid alongside private companies. The project is awarded to that entity quoting the lowest annualized tariff. In the case of RTM, the project is awarded to PGCIL, on nomination basis, with the tariffs fixed upfront. The decision of awarding a project on RTM or TBCB basis is taken by the Empowered Committee on Transmission (ECT).
Here are some highlights of PCGIL’s TBCB portfolio:
- PGCIL had a total portfolio of 19 TBCB projects with an estimated project size exceeding Rs.24,000 crore, as of March 31, 2020.
- Out of these 19 projects, eight, with a total project size of Rs.12,352 crore, were operational, as of given date. All these eight projects represented interstate transmission system (ISTS) projects.
- The remaining 11 projects were under construction, as of March 31, 2020. These 11 projects included seven ISTS projects, with a total value of Rs.9,000 crore; and four intrastate transmission system (InSTS) projects with an aggregate project size of Rs.3,000 crore.
- These four InSTS schemes included three in Uttar Pradesh and one in Madhya Pradesh.
- During FY20, the total order inflow of TBCB projects, at Rs.6,599 crore (as discussed earlier) came from four ISTS schemes. All these four related to power transmission infrastructure linked to renewable energy projects.
- The eight operational TBCB projects of PGCIL, as of March 31, 2020, comprised 19 transmission lines spanning 6,258 ckm and four substations with a total transformation capacity of 9,630 MVA.
- TBCB projects accounted for 5.4 per cent of PGCIL’s total gross block, as of March 31, 2020.
To put the TBCB-based power transmission landscape in perspective, India had 50 “live” projects as of March 31, 2020. Four others were troubled projects that included two under litigation, one cancelled by CERC and one in which the private developer had sought cancellation of the project.
Of these 50 active projects, PGCIL was involved in 15. Thus, PGCIL’s market share works out to 30 per cent, in terms of number of projects. However, in terms of project size, PGCIL’s market share would be much higher as it has some highly capital-intensive projects in its portfolio. In terms of private players, Sterlite Power also had 15 projects followed by Adani Transmission with 11. The remaining 9 projects were distributed amongst several developers, prominent of these being Essel Power.
