T&D technology suppliers have to rely on the Power Grid Corp of India for the big orders

Equipment manufacturers and contractors will count on state firms for large orders next fiscal as power sector giants plan to invest Rs 50,000 crore in various projects, although the private sector has been stymied by fuel scarcity and distribution problems.

According to government sources, a  major chunk of these investments will come from internal and extra budgetary resources of public sector undertakings (PSUs) while the government will pump in close to Rs 10,000 crore through gross budgetary support.

India’s largest power producer NTPC and inter-state transmission major Power Grid Corporation will cumulatively bring in over Rs 40,000 crore investments in 2013-14.

NTPC will spend Rs 20,200 crore for ongoing and new projects, including Rs 5,113 crore for renovation and modernisation. It will spend over Rs 6,650 crore for its power projects at Kudgi, Barh, Solapur and Bongaigaon. Among new initiatives, NTPC will spend over Rs 2,131 crore for Tanda, Lara, Darlipalli, Unchahar, Rammam and renewable energy project works. Power Grid is another central PSU with Rs 20,000 crore investments lined up for the fiscal year that starts in April. Almost Rs 18,500 crore will be spent on 126 ongoing schemes while Rs 1,286 crore will be spent on 57 new schemes. Power Grid has also made provision of Rs 223 crore for residuary works in 98 completed schemes.

Commenting on the government expenditure in power sector for the coming fiscal, Indian Electrical & Electronics Manufacturers’ Association (IEEMA) president JG Kulkarni said: “The lopsided investment pattern needs to be corrected and we need an investment ratio of 2:1:2 amongst generation, transmission and distribution segments in order to achieve a balanced growth in the power sector. It is heartening that there is some move towards correcting this lopsided investment pattern in the 12th Plan.”

According to IEEMA estimates, T&D equipment manufacturers are working at only 70% of their production capacity. “Based on the projections of the government for capacity enhancement in power generation, transmission and distribution in the 10th, 11th and 12th Plans, the domestic electrical equipment manufacturing industry has made huge investments in doubling and, in some cases, even tripling its production capacity. However, this built-up capacity currently stands under-utilised across several products due to sluggish domestic demand on account of the slowdown in the power sector and a surge in imports of electrical equipment in recent years,” added Kulkarni.

Among other government ventures, Damodar Valley Corporation will invest Rs 4,080 crore for augmentation of existing projects while Rs 37 crore will also be spent on equity participation in own and joint ventures. An outlay of Rs 474 crore has also been proposed for transmission and distribution schemes, communication and R&D centres. Tehri Hydroelectric Development Corporation will also invest Rs 580 crore for various projects.

Satluj Jal Vidyut Nigam that is investing Rs 10,400 crore during 12th Plan will spend Rs 1,000 crore next fiscal for different projects, including Rs 150 crore for wind power. North Eastern Electric Power Corporation will invest Rs 2,029 crore in 2013-14 as part of Rs 6,273-crore outlay for 12th Plan. The power ministry has also proposed an outlay of Rs 37 crore for Central Electricity Authority for various initiatives to strengthen its institutional framework in power sector.