6-7 firms likely to bid for Power Grid tower infrastructure

Six to seven companies are likely to bid for Power Grid Corp of India Ltd’s tower infrastructure, a person familiar with the development said.“Monday was the last day to buy bid documents. Six to seven companies have bought the papers. These include Reliance Infratel Ltd, Bharti Infratel Ltd, Indus Thomas, American Tower, GTL Infrastructure Ltd and Viom Networks Ltd,” the official said.The bids have to be submitted by November 22.

The state-owned central transmission utility has invited bids from mobile service providers and tower infrastructure companies to take its 12,000 towers on a 10-year lease.The company has invited bids from telecom infrastructure and mobile service providers for sharing its towers in Jammu & Kashmir, Haryana, Punjab and Himachal Pradesh. PowerGrid’s telecom operations, contributing around 2% to its overall revenues, recently achieved breakeven. The company reported operating revenues of Rs 2126 crore in July-September. Two months ago, the company, acting on the advice of its consultant KPMG, decided to lease out its towers.

PowerGrid is India’s largest power transmission company, owning and operating more than 95% of the country’s interstate and inter-regional power transmission systems. It currently owns and operates close to 79,556 circuit kilometres of electrical transmission lines and 132 substations through which it carries more than 47% of the total power generated in India.

Currently, PowerGrid has 68 transmission projects in various stages of implementation involving 40,000 circuit km of transmission lines and 65 substations with a total power transmission capacity of around 106,000 MVA. The company, which has already spent Rs25,405 crore till FY10-end towards investment in transmission projects for the 11th Plan, seems to be on track to incur a capex of Rs55,000 crore by FY12-end.Further, the company has projected investments of over `110,000 crore in the 12th Plan as the management expects the pace of capacity addition to pick up further.Though transmission is the main business segment, contributing over 91% to both revenue and operating profit, the company has also diversified into transmission related consultancy services and fibre optic telecommunications infrastructure business, which currently contribute around 4% and 2%, respectively to overall revenues.The company, which has been able to maintain a system availability rate of over 99% since fiscal 2002, is also eligible to earn additional incentives for maintaining high efficiency, as per Central Electricity Regulatory Commission guidelines.