Power Grid Corp likely to gain independence from ministry

11 Oct 2013

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India's power ministry proposes to hive off its electricity grid operating subsidiary Power Grid Corp of India Ltd into an independent company to avoid conflict of interest in the power transmission sector.

The ministry has circulated a note for consideration by the cabinet committee on economic affairs to provide autonomy to a proposed Power System Operation Corp (POSOCO) which will operate the electricity grid, penalise distribution companies and power generators for indiscipline and coordinate with regional grid managing authorities, according to a PTI report.

"There are a lot of private companies now entering the power transmission space. We decided to separate POSOCO from Power Grid Corp as we cannot have a public sector company competing with private companies for setting up transmission network and at the same time operating the grid," a top power ministry official said.

Inter-state and intra-state power transmission projects worth Rs22,000 crore are currently either under bidding or have just been awarded. The government is also expected to invite global bids in the next two months to set up another dozen inter-state power transmission projects worth Rs20,000 crore.

Private firms like Reliance Infrastructure, Sterlite Industries, and L&T Infra have been awarded power transmission projects in the past two years.

Companies like Sterlite Industries, L&T infra, PowerGrid Corp of India, Tata Projects, Kalptaru Power Transmission, UK-based Balfour Beatyy Infra and Spain's Isolux Corsan are among the companies bidding for transmission projects.

Presently, POSOCO facilitates transfer of power across the country and trans-national exchange of power by coordinating functioning of national and regional power systems.

The wholly owned subsidiary of Power Grid Corp supervises all grid constituents and also ensures infrastructure planning and implementation for smooth operation.

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