15 Jan 2002 – In a bid to encourage private sector participation in the transmission sector, the Power Grid Corporation of India Limited (Pgcil) is to sign a joint venture agreement with utility Tata Power for 12bn Rupees ($248m) to participate in the Tala hydroelectric power project.
The signing of agreement, which is due to occur by the end of the month, has been delayed due to certain clarifications. PGCIL will have 49 per cent stake in the joint venture while Tata Power will retain 51 per cent stake with the management control.
Pgcil chairman and managing director R P Singh said the investment would have a 3:1 debt-equity ratio with Pgcil contributing 1.48bn of the equity portion.
“Tata Power has been selected as joint venture partner for 400 kV high capacity lines associated with Tala HEP, part of National Grid,” said Singh.
The corporation had advocated both, joint venture as well as Independent Private Transmission Company (IPTC) routes for the participation of private sector in the transmission projects. Singh said under the IPTC route, the private companies would make 100 per cent their own investment while in the joint venture route, PGCIL would participate in the investment along with private company.
Separately, South Africa expressed its willingness yesterday to invest in India’s power sector, whilst also seeking the introduction of free trade between the countries.
Essop Pahad, South African Minister in Presidency, said the country’s public sector power utility Ascon, which is presently undergoing a restructuring programme for privatization, may consider investments in various Indian states including West Bengal.
He said his government would co-operate with other private firms willing to make investments in the power sector and other areas.