Standard Post with Image

Competitive Bidding for Transmission Projects; Is it Fair for Private Player?

News:

In a first, power generating companies have requested the ministry of power to control the escalating power transmission costs by bidding out all projects. The power producers, in their submission to the government, said the cost-plus projects in transmission should be scrapped and all projects should be awarded contracts through the competitive bidding route.
Source: Business Standard

SNP Insight:

Awarding contracts through the competitive bidding route would certainly bring down the cost of transmission project decreasing the overall power tariff. However, dual role of PGCIL as transmission planning (CTU) and execution of transmission projects may privy to certain non-public and cost senstitive information and may oppose the very essence of competition. This problem may overcome by hiving off CTU from PGCIL as also recommended by the FICCI 2013 report on power transmission.
Source: SNP Infra Research