BW Businessworld

Power Grid To Deliver Strong Performance In 2017, Says Chairman

Sale of assets under the InvIT model as suggested by the power minister seen as a way out to monetise existing assets

It was a year of achievements for Power Grid Corporation India Limited in 2016 but the company says it cannot rest on the laurels and has a responsibility to maintain deliver similar performance in 2017.

The company is focusing on new business opportunities coming up in the power transmission and distribution sector, Power Grid chairman and managing director I.S. Jha told BW Businessworld.

Jha also talks about various challenges ahead.

"Smart Grid is the basic building block of Smart Cities and the government initiative for development of 100 smart cities would open door for investment in the distribution system. Power Grid is also looking for new projects in transmission, sub-transmission and distribution systems through EPC route nationally as well as internationally in 2017," he said.

On the proposed sale of assets under the InvIT model as suggested by the power minister, Jha said it is a way out to monetise existing assets.

"We have a large share of assets which are giving us revenue", he said, when asked how good the proposal of infrastructure investment trust or InvIT model to monetise assets.

At present the company has a capex or projects worth one lakh crore to be invested in the next 3-4 years, which is sufficient but more opportunities may come and would be explored, Jha said.

"The InvIT model is an excellent route available to the infrastructure sector as it gives a way out to monetize existing assets and to reinvest freed capital in any additional business opportunities. Power Grid in this direction has already started exploring the feasibility and shall ready itself," he said.

"It is still an early stage to commit something. But as and when a new business opportunity of investment (both globally as well as in domestic markets) presents itself, Power Grid will invest in that new opportunity by monetizing its existing assets through InvITs and other available routes," Jha added.

The company at present has close to 1,40,000 crore worth of projects in hand at various stages of execution.

"We are targeting a capex of about Rs 1,00,000 crore in the next four years for transmission projects. Our top priority is to complete these works in hand through focus and planning," Jha said.

With a strict financial control, Power Grid gives more emphasis on capital efficiency and inventory management which reflected upon the company's balance sheets last fiscal.

The concerted efforts towards reducing capital works in progress, through faster capitalization and prudent addition to CWIP, resulted in better margins for Power Grid.

"Efforts were also made for the timely presentation of our petitions for tariff in CERC highlighting numerous issues that we face during construction over long distances, in cases of delays," Jha said.

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