Power Grid in talks with SAIL, NALCO for equipment JV

[1]

In a major diversification plan, state-run Power Grid Corporation is in discussions with three companies, including SAIL, for setting up an equal joint venture to manufacture transmission equipment.

Power Grid Corporation of India sets up electricity transmission network.

"We are in talks with SAIL, NALCO, RINL to form a joint venture for setting up a manufacturing unit that would build towers, insulators, conductors and other ancillary equipment for power transmission network," a senior Power Grid official told agencies.

"The company will seek government approval for the joint venture," he noted.

According to the official, the overall investment in the joint venture would be around Rs 300 crore and Power Grid is expected to select a partner for the joint venture from these three PSUs this year.

"For the manufacturing plant, we will need good supply of raw materials and that will be taken care of, if the joint venture with one of these entities comes through," he noted.

Steel Authority of India Ltd (SAIL), National Aluminium Company (NALCO) and Rashtriya Ispat Nigam Ltd (RINL) are major players in the steel and minerals sector.

The Power Grid official said the manufacturing facility would primarily cater to the company's needs as well as domestic demand. "We would also look at exporting the equipment," he added.

At present, Power Grid sources transmission equipment from various private players.

The official also said that it would more cost-effective to have a manufacturing facility.

In the current Five-Year Plan ending March 2017, Power Grid expects to see a capital expenditure of Rs 1 lakh crore and most of the required funds have already been tied up.

Power Grid plans to add about 40,000 circuit kilometres in the 12th Five-Year Plan period (2012-17). At present, it has over 94,000 circuit kilometres of lines.

One circuit kilometre generally refers to one kilometre of electrical transmission line.

The central transmission utility reported nearly 21 per cent jump in profit after tax at Rs 3,255 crore in the last fiscal. In 2010-11 period, the same stood at Rs 2,697 crore.