Power Grid Corporation of India (PGCIL) placed orders worth Rs.30,200 crore in FY17, making it the highest level in any single year in its history. PGCIL CMD, I.S. Jha, highlighted this achievement and elaborated on several others during a recent press meet in Mumbai to discuss the company’s financial results for FY17. PGCIL commissioned assets worth Rs.32,000 crore (including projects under the tariff-based competitive bidding route) in FY17, also making it the highest such commissioning in any year so far. The highest-ever capital expenditure, at Rs.24,429 crore in FY17, was also the maximum in any year thus far.
During FY17, PGCIL commissioned transmission lines worth around 10,300 km, constructed 12 new substations with aggregate transformation capacity of 34,695 MVA and also commissioned new inter-regional transmission capacity of 15,000 mw.
As of March 31, 2017, India’s total inter-regional transmission capacity stood at 75,050 mw, out of which PGCIL commanded a share of 85 per cent. It may be mentioned that the remaining 15 per cent was held jointly by private sector players that are now in the fray for developing interregional lines under the tariff-based competitive bidding (TBCB) modality. It is worthwhile mentioning here that during the XII Plan period (FY13 to FY17), India added 47,300 mw of inter-regional transmission capacity that was nearly twice the level at the beginning of the XII Plan period.
Another important achievement discussed by Jha was the sharp improvement in the capitalization of assets, in recent years. The PGCIL CMD explained that it was traditionally observed that the value of assets put into commercial operations in any year was far lower than the capital expenditure incurred during that year. However, in recent years, due to better project monitoring and implementation, this phenomenon has reversed. Jha observed that during the past two fiscal years—FY16 and FY17—PGCIL could actually put more assets in commercial operations (which is known as “capitalization”) than the capital expenditure. As assets are turning productive faster, it has an overall positive impact on the cash flows, Jha explained.
On the outlook for the next five years, I.S. Jha noted that India’s power transmission sector would see an investment of Rs.2,06,000 crore out of which PGCIL would account for Rs.1,00,000 crore, the rest would be invested towards intrastate transmission lines, and interregional transmission lines under the TBCB route. PGCIL’s investment in the next five years would also go towards building transnational interconnections with neighbouring countries like Sri Lanka, Bhutan, Nepal and Bangladesh.
On the subject of diversification into value-added areas, Jha noted that creating charging infrastructure for electric vehicles is amongst the high-potential avenues identified. Smart grid and railway electrification would also represent new thrust areas. Thanks to the Puducherry pilot Smart Grid project, PGCIL has been approached by several states, Jammu & Kashmir for instance, for similar projects. Also, if separation of “carriage” and “content” in power distribution, is implemented, PGCIL would also be in a position to enter the power distribution business, Jha explained. Separation of carriage and content is an important policy reform and has been under discussion for several years now. In brief, this measure aims to create two separate entities for power distribution (carriage) and power supply (content.)
