The new proposal by Power Ministry will attract private investment to create healthy competition in power transmission sector by reducing the role of PowerGrid Corp.
July 22, 2016
The power ministry approached Cabinet with a proposal aimed at attracting private investment in transmission space, wherein PowerGrid Corp might lose the ownership of country’s electricity transmission network. As per the proposal, the government intends to create an independent entity that will manage, own and regulate power transmission lines.
PowerGrid plays an active role in operation and planning of transmission network in India. In other words, it is responsible for wheeling the electricity generated. After the proposal, ministry has decided to reduce the role of PGCIL to just a developer of transmission lines to foster healthy competition in power transmission sector.
After separating the management of PowerGrid and electricity grids in 2014, government will now have limited flexibility to award transmission projects on nomination basis. Additionally, the Rural Electrification Corp and Power Finance Corp will continue to bid out transmission projects whereas, PGCIL will compete with private companies to secure projects.
