The Government has begun to separate the electricity transmission system planning business from the Power Grid Corp of India (PGCIL)—a long-standing demand from the industry for a fair supply of transmission lines.
The move will help PGCIL diversify into other businesses and comes just as soon as the government has launched a power distribution program starting with the union territories. Sources said Power Grid Corp may be exploring the bidding process for some of the upcoming block distribution licenses.
The Government ordered Power Grid Corp to immediately set up the Central Transmission Utility (CTU) as a 100% subsidiary with a separate accounting and board structure that would define and plan the country's transmission networks.
The CTU subsidiary would be divided into a wholly owned government entity within six months, according to sources. PGCIL was asked to prepare the rules and guidelines for the process.
Private power transmission companies have repeatedly argued that PGCIL intentionally overrides transmission planning in such a way that the lines are delayed and handed over to the state-run firm on the basis of appointment. On the other hand, PGCIL has stated that the transmission planning process is collaborative and transparent and that there is a well-established transmission system planning procedure under which transmission planning is carried out by the Central Electricity Act (CEA) in conjunction with CTU, POSOCO and other stakeholders.
