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Global ambitions in power

Power Grid Corporation of India Ltd. (PGCIL), a public sector power transmission utility, has started eyeing global business. It plans to set up a base in Dubai, looking for a share in the West Asian and global transmission consultancy business. For a start, it is looking for a stake of up to 20 per cent in the Philippines National Transmission Company. More importantly, the PGCIL hopes to position itself in West Asia to bid aggressively in the consultancy and infrastructu re projects coming up in the region. Aside from seeking to utilise the experience and expertise it has gained in India, where it transmits 45 per cent of the power generated in the country, the corporation basically wants to raise more resources for its ambitious projects at home. It has taken on the responsibility of trebling its transmission capacity in India over the next five years, for which it needs to invest about Rs.55,000 crore. At a time when the corporation looks to spreading its wings, its Chairman and Managing Director R.P. Singh, has also been made the first President of the “Very Large Power Grid Operators” this year. The forum covers a spectrum of transmission utilities across the world, from the United States and Brazil to the United Kingdom, China, and Japan.

The PGCIL, which also went in for an IPO recently, has 45 major transmission projects under implementation. As of now, there is no immediate threat to its monopoly business in the country. The corporation has shown its business acumen by entering into a partnership with private players such as the Tata group to evacuate their power to the grid. But the situation could change in the future. So it becomes essential for the public sector undertaking to prepare for competition and strengthen its resource base. It has already diversified into communications, having built a fibre optic cable network linking 60 cities. Considering that it has implemented major transmission projects in India in a very difficult terrain and managed to maintain 99 per cent efficiency in its gird, it can be optimistic about competing for major projects in the developing countries. Being an Indian company, it can always look east, including at the Philippines or other developing countries in Southeast Asia. Basically, the corporation wants to step up its return on investment — targeting 18 per cent a year, compared to 14 per cent at home. It should bid for consultancy projects and contracts in countries where there can be a significant expansion of transmission capacity.

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