Power Grid Corporation of India Ltd has signed a memorandum of understanding with ECC Kema, a Netherlands firm, to bid jointly for international projects. The company is also mulling making an initial public offering in 2005.
Speaking to press persons here today, R P Singh, chairman and managing director, Power Grid, said that his company's international bids have largely proved unsuccessful but for the one project in Afghanistan.
"What has been going against us is our lack of foreign experience," he explained.
Power Grid, which lost out on three bids in Africa, is now looking at doing better armed with a partner whose expertise is in transmission system design, pricing and low despatch systems. To start with the duo are bidding for projects in Uzbekistan.
With a domestic investment target of Rs 71,000 crore (Rs 710 billion) by 2012, the corporation is negotiating for loans grossing about $2 billion from World Bank and Asian Development Bank.
"The ADB loan negotiations are scheduled to happen in November, while the talks with World Bank are expected in January-February," Singh informed. The Corporation is also tossing with idea of an IPO next year.
"We did not think of this earlier, as we did not really need the money. We then wanted to watch how the NTPC IPO fared. We are also waiting for the CERC norms," Singh explained.
Of the targeted Rs 71,000 crore, the corporation will have to independently raise Rs 51,000 crore (Rs 510 billion), with only Rs 20,000 crore (Rs 200 billion) earmarked to be brought though private participation.
Having developed the northern, eastern and southern regions well, the National Grid will now turn its attention on the western region and is looking at an investment of $ 1 billion there, next.
On Wednesday the Cabinet Committee on Economic Affairs will be clearing a Rs 600 crore (Rs 6 billion) project for strengthening systems for the southern region.
With National Grid which currently has the transmission capacity for 9,000 mw, will go up to 9,500 mw by December, he added. The biggest beneficiary of the grid so far has been the southern region.
"In 2003-04 Tamil Nadu (which is the main constituent of the Southern Region - II, comprising of TN, Pondicherry, Kerala and Karnataka) alone saved up to Rs 400-500 crore (Rs 4-5 billion) due to the grid," he said. The state of the art control room built at Bangalore, help consumers buy power at their cheapest rate at any given time, he explains.
Operating on high voltage capacity transmission lines have meant a per day saving Rs 2 crore (Rs 20 million) for the Southern Region II, he pointed out. During 2003-04, this amounted to a saving of Rs 290 crore (Rs 2.90 billion).
Tamil Nadu, which is allowed to draw between 1500-1600 mw from the grid, usually exceeds its quota by 100-150 mw. Today, of the 12 National Grid service stations located in Southern Region-II, six are in Tamil Nadu..
The target is to raise the total service stations in the region to 20. The grid covered about 600-700 kms in the region in the past two years. The investment envisaged for the southern region is Rs 4,665 crore (Rs 46.65 billion).
