CEA rules against Power Grid’s plea to defer Vemagiri-Hyderabad line

CEA rules against Power Grid’s plea to defer Vemagiri-Hyderabad line.

Written by Anil Sasi | New Delhi | Published:October 21, 2013 3:37 am

Attempts by state-owned Power Grid Corporation Ltd (PGCIL) to defer the implementation of a key transmission line in the southern region that it bagged after submitting an extremely aggressive tariff bid have suffered a body blow,with the power sector’s apex planning body categorically ruling that the Rs 1,300 crore Vemagiri-Khammam-Hyderabad 765 kV line be “implemented as soon as possible”.

After bidding an aggressive levelised tariff of Rs 119.7 crore per annum for the Vemagiri transmission system,which is being set up to wheel power from upcoming gas-based private power plants in the southern region,PGCIL is learnt to have pushed hard to defer the project,citing that it would not be in a position to implement the project “till there is a clarity on availability of gas based generation projects in Vemagiri area of Andhra Pradesh”.

PGCIL,which had bagged the project in April 2012,subsequently moved a petition before the central power regulator (CERC) stating that with “the time overrun” — which was precisely on account of PGCIL dragging its feet on starting work on the project — it will “not be possible to implement the transmission system within the capital cost commensurate with the quoted tariff”. The transmission firm,accordingly,sought an increase in the transmission charges and higher capital cost when implemented.

The regulator,in its observations while examining the petition,noted that PGCIL “does not seem to be very keen to implement the transmission system” unless it was assured of recovery of the transmission charges. It had subsequently asked the power sector’s apex statutory planning body,the Central Electricity Authority (CEA),to undertake a review of the entire matter afresh.

The CEA,in its response submitted the the regulator on September 30,has categorically ruled against PGCIL’s plea for deferring the project and has said “the Vemagiri-Khammam-Hyderabad 765 kV D/C line that is already awarded to PGCIL may be implemented as soon as possible”. Power ministry officials indicated that attempts by PGCIL to delay the key transmission project could be a result of the utility having bid aggressively for it to edge out private competitors and then realising that it would not be able to execute the project within the promised costs.

A CERC official said it had got the response from the CEA and would take its views into consideration. A PGCIL official said pre-award activites for this line have been completed and post-award activites have been undertaken and that it will await the CERC ruling on the issue.

POWER STRUGGLE

* After bidding an aggressive tariff of Rs 119.7 crore per annum for the Vemagiri transmission system,PGCIL is learnt to have pushed hard to defer the project

* PGCIL has said it would not be in a position to implement the project “till there is a clarity on availability of gas-based generation projects in Vemagiri”

* The company had moved a petition before CERC stating that it would not be possible to get the link running due to time overruns

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