There seems to be progressive movement in the transmission and distribution sector, which is expected to give an impetus to growth of this space, says Ramesh Chandak, Managing Director and CEO, KEC International Ltd
Do you think that there are enough investments coming into the nation´s transmission systems?
Yes, the planned transmission line capacity addition and distribution capacity addition during the 12th Five-year Plan envisages an investment of around Rs 180,000 crore and Rs 306,235 crore respectively. Further, Power Grid Corporation (PGCIL) has planned a capex of Rs 110,000 crore for the 12th Five-year Plan. At this stage it is essential the investment planned is rightly utilised and properly monitored.
Recent data indicates that transmission capacity has grown only by 30 per cent, whereas generation grew by 50 per cent. What are the reasons for this gap? Will this gap be made up in the future?
The T&D sector in India continues to face several challenges; numerous large projects are being stalled on account of delays in land acquisition problems, RoW, funding constraints etc. The projects are also held up due to shortage of availability of fuels like coal and gas. Delay in project execution adversely impacts the revenue growth rates of infrastructure companies in turn impacting the capex investment scenario. This sector needs more policy related focus to expedite and remove the execution and procedural bottlenecks. The new Government´s initiative of integrating related ministries like coal, power and renewable energy is a good move which will improve the operational and procedural aspects of the power industry as a whole. Speaking of the future only time will reveal the actual outcome; however, the industry sentiment seems to be positive on development and growth aspects.
Do you think the recent Union Budget will make any difference to the power transmission sector in India?
Although the Government has not allocated large funds for the T&D sector, the increased emphasis on PPP model is good for the T&D sector. Development and growth of T&D infrastructure has also been one of the thrust areas of the BJP Government. Post the Budget there are recent reports of the Government planning to give a major push to the infrastructure sector; an infra revival roadmap is likely to be presented to the Prime Minister by the end of July 2014. There seems to be progressive movement in this space which is expected to give an impetus to growth of this sector. On an overall level, the Budget signals long term confidence. It has some positive elements regards GST, CAD and fiscal deficit. The increase in the FDI limit for insurance and defence sectors to the extent of 49 per cent, REITs tax incentive, allocation of funds for road development including the national highways, improvement of railway connectivity in border and NE areas and schemes pertaining to sewerage treatment/ drinking water in urban areas are good progressive steps. Also, the initiative on development of inland waterways, river interconnection and cleaning of Ganga River are welcome moves. On the power sector front, particularly the 10 year tax holiday for power projects and Deen Dayal Upadhyaya Gram Jyoti Yojana are good.
Are you happy with the level of technology adoption in the industry?
The Indian T&D industry is mature and matches international standards. There is enhanced level of technology adoption. At KEC, our experience of working in different countries, with different technologies helps us tremendously while implementing projects globally. We operate in around 50 countries. Each country adopts a different constructing technology. In Abu Dhabi, everything is using cranes. In Kazakhstan, everything is prefabricated as the temperature remains in the -40 degree levels through the major part of the year. In South Africa, the execution technology is entirely different.
Recently we executed a prestigious river crossing transmission line project on Hooghly River in West Bengal which involved erection of total two towers in mid-river and two towers at the shore. On account of high wind velocity helicopters could not be used and instead specialised barges and cranes were used to build the 284 meter (775 feet) tower in mid river. Each tower weighed around 1,790 mt. This is probably the largest ever transmission line tower erected in India and its height is about 75 per cent of the height of the Eiffel Tower.