IPPAI Seeks Level Playing Field in Distribution of Transmission Projects

The Independent Power Producers Association of India (IPPAI) has announced that it has shot off a letter to the Power Ministry seeking level playing field for private sector players via-a-vis state-run Power Grid Corporation of India (PGCIL) in distribution of electricity transmission projects.

"We seek your suo moto intervention in this matter in the interest of maintaining a level playing field in this segment (transmission) of the power sector and to stop the misuse of public funds which are procured at very low costs (by PGCIL) from multilateral agencies against sovereign guarantees of the Government of India," IPPAI held in its letter written to the power secretary.

The industry body held that in view of the leading position of PGCIL replicated in its predacious bid pricing, the ministry should safeguard that the low-cost pool of funds raised by the company are not permitted to cross-subsidize TBCB (tariff based competitive bidding) projects.

The IPPAI also pursued separation of the central transmission utility (CTU) role of PGCIL from its role as an asset developer to create a level playing field for competition and ensure delivery of the cheapest cost of landed power to consumers.

It appealed that PGCIL often gets projects on a nomination basis under Section 62 (cost plus) of the Electricity Act 2003 and is allowed a pass through of any cost escalation which is incurred due to any delays in projects.

However, it said that the projects competitively bid under Section 63 (which are primarily done by private sector transmission companies) are imposed with stiff penalties by the regulators for delays.