The capital expenditure of Power Grid Corporation of India Ltd (PGCIL) on interstate transmission system (ISTS) schemes is estimated to be around Rs.8,300 crore during the ongoing fiscal year FY22, according to information tabled in Parliament.
The information tabled in Parliament also suggests that in FY22 the Northern Region will be the biggest beneficiary of this ISTS-related capex by PGCIL. This region is expected to see capex of Rs.5,262 crore in FY22, as against Rs.4,716 crore in FY21. In fact, of the total PGCIL ISTS-based capex in FY22, the Northern Region will be accounting for a significant 63 per cent. Within the NR, Rajasthan will account for the maximum capex of Rs.3,008 crore in FY21, followed by Uttar Pradesh with Rs.2,000 crore.
The Western Region will see capex of Rs.1280 crore in FY22, followed by the Southern Region with Rs.865 crore. ISTS-related capex of PGCIL in the Northeastern Region is expected to be Rs.574 crore while that in the Eastern Region would be Rs.319 crore, in FY22.
PGCIL’s ISTS-related capex includes RTM (regulated tariff mechanism) and TBCB (tariff-based competitive bidding) projects. The high capex of Rs.3,008 crore in Rajasthan also reflects the fact that the Central PSU has won at least five TBCB-based ISTS projects, all in Rajasthan, in FY22.
As can be seen from the table, the overall ISTS-related capex by PGCIL has been witnessing a declining trend. This reflects two phenomena. First, there has been a gradual reduction in the number of ISTS projects being awarded to PGCIL on RTM basis. Due to this, projects are increasingly shifting to the TBCB mode, which, in turn, in attracting other (private) transmission developers.
During FY19 and FY20, the Southern Region was a big destination for PGCIL’s ISTS-based capex. This region saw Rs.11,946 crore worth of capex in FY19, followed by Rs.6,922 crore in FY20. The Raigarh-Pugalur HVDC link was the primary reason for this huge capex, benefitting Tamil and Kerala, the most.
ISTS Opportunity
In an investor presentation dated around February 10, 2022, PGCIL had estimated a total business opportunity of Rs.23,700 crore arising from ISTS projects, under the TBCB mode. This includes Rs.12,900 crore worth of projects under bidding and Rs.10,800 crore worth of projects where bidding was to be initiated. Apart from this, PGCIL also estimated around Rs.2,000 crore worth of intrastate transmission system (InSTS) schemes to be awarded under the TBCB route.
