Power Grid sees huge opportunity in railway line electrification

Last year, Power Minister Piyush Goyal had talked about the government's plans to rope in PGCIL for meeting the tall order of electrifying 35,000 km of tracks.

By: PTI | Mumbai | Updated: February 13, 2017 11:43:49 am

The Indian Railways’ plan to electrify 24,000 kms of railway lines in the next five years is a huge opportunity for state-run Power Grid Corporation (PGCIL) for providing its expertise through consultation as well as complete turnkey project development, a senior company official said. PGCIL has already been awarded the contract to electrify 761 km of rail lines at a cost of Rs 888.96 crore. The four stretches to be electrified by PGCIL are Pune-Miraj-Kolhapur (326 km at a cost of Rs 513.07 crore), Chhindwara-Nainpur-Mandla Fort (183 km at Rs 90.71 crore), Londa-Miraj (189 km at Rs 208.15 crore) and Mansi-Sahrsa-Dauram Madhepura (63 km at Rs 77.03 crore). The Indian Railways has set a target of electrifying 2,000 km in FY17, 4,000 km in FY18 and 6,000 km annually during FY19-FY21.

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“We are already providing consultancy as well as complete turnkey services for these four lines. We are yet to know from the ministry about its plans to bid out the projects, but looking at the potential it poses, PGCIL sees a huge investment opportunity,” the official said requesting anonymity. Last year, Power Minister Piyush Goyal had talked about the government’s plans to rope in PGCIL for meeting the tall order of electrifying 35,000 km of tracks.

With nearly Rs 1,30,000 crore worth of transmission projects yet to be executed over the next five years, the Navratna firm is expecting to invest more than Rs 1 trillion between FY18-FY22. “To execute Rs 130,000 crore worth projects, we would need to invest around Rs 92,000 crore. But as the government continues to bid for new projects, we will try to participate in maximum number of them. Therefore, our capex requirement will go up significantly.

“In the 12th Plan (FY13-FY17), we increased the investment to Rs 110,000 crore. But we are hopeful that for the 13th Plan, it will exceed this number,” the official added. PGCIL also plans to focus on intra-state transmission projects and will be bidding for 10 such projects worth Rs 5,265 crore in four states under the tariff-based competitive bidding.

It is also planning to bid for seven inter-state transmission projects worth Rs 8,697 crore. “In the intra-state projects, we have offered to invest in projects at 7-8 per cent interest rate which would reduce the cost of projects, where the interest rates are around 10 per cent,” the official added.

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