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| Photo Credit: VELANKANNI RAJ B
Private sector power transmission companies have urged the Union Power Ministry to debar state-owned Power Grid Corporation of India Ltd. (PGCIL) from all current and future rounds of tariff-based competitive bidding (TBCB) for transmission lines till the conflict of interest between the latter and the Central Transmission Utility of India Ltd. (CTUIL) is resolved.
In a recent letter to Union Power Minister R.K. Singh, the Electric Power Transmission Association (EPTA) alleged that there was a conflict of interest between PGCIL and CTUIL , the nodal agency for all transmission projects across the country.
“While we have no doubt that you would see merit in our request, it is suggested that in the interim, CTUIL may kindly be directed to debar PGCIL from further participation in ongoing and future TBCB bids till such time that the separation between PGCIL and CTUIL is complete,” EPTA director general Vijay Chhibber said in the letter.
Earlier, EPTA had urged the power ministry to ensure arm’s length between the CTUIL and all bidders to bring sanctity to tariff based competitive bidding.
The association had said that while TBCB was beneficial to the industry and consumers, the mechanism could not be completely transparent and successful because of PGCIL’s “disproportionate control and influence” over CTUIL.
Pointing out specific examples of conflict of interest, EPTA said that the Director (Projects) of Power Grid was the chairman of the Board of Directors of CTUIL. On the other hand, the Director (Projects) also heads all special purpose vehicles (SPVs) that have been set up for each of the successful bids achieved by PGCIL.
Further, all expenses of CTUIL continue to be funded by PGCIL. According to the association, tenders participated by Power Grid are conceived and designed based on CTUIL’s recommendations.
“The participation of PGCIL as a tenderer in bids for transmission projects, which have been conceived, designed and issued at the instance and on the advice of the CTUIL is thus a textbook case of conflict of interest offering PGCIL undue advantage in formulating its bids and planning its business strategy well in advance compared to the rest of the market,” the association said in the letter.
“The perception amongst transmission developers is that while the de-jure demerger has been ensured by the Ministry of Power, the separation as envisaged under the Scheme is being resisted and delayed by both PGCIL and the CTUIL,” the association added in the letter.
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