Karnataka Opens Power Transmission to Private Firms via BOOT Model
Karnataka has initiated a significant policy shift, opening its intra-state power transmission sector to private companies. Two key substations, HPTL and MPTL, are slated for handover under the Build, Own, Operate, and Transfer (BOOT) model.
Key takeaways
- Karnataka is opening its intra-state power transmission sector to private companies via the BOOT model.
- Two substations, HPTL and MPTL, will be operated by private entities after KERC approval.
- Resonia Limited and Dilip Buildcon Limited are the lowest bidders for the HPTL and MPTL projects, respectively.
- This move marks a significant policy shift for Karnataka, following similar initiatives in other Indian states.
Karnataka is set to permit private entities to operate two significant intra-state power transmission substations for the first time. This move, facilitated by the Build, Own, Operate, and Transfer (BOOT) model, awaits approval from the Karnataka Electricity Regulatory Commission (KERC).
What Happened
The Karnataka Power Transmission Corporation Limited (KPTCL) has submitted a request to the KERC for transmission licenses to be granted to private companies that emerged as the lowest bidders. Hampapura Power Transmission Limited (HPTL) in Mandya district and Mekhali Power Transmission Limited (MPTL) in Belagavi are the substations involved. These entities were initially established as Special Purpose Vehicles (SPVs) by REC Power Development and Consultancy Limited (RECPDCL), an organization under the Ministry of Power, Government of India.
Resonia Limited has been identified as the lowest bidder for HPTL, while Dilip Buildcon Limited secured the bid for MPTL through a Tariff Based Competitive Bidding (TBCB) process. The HPTL project includes the construction of a 400/220/33 kV substation at Hampapura and associated transmission lines to enhance power supply reliability in Mandya. The MPTL project involves a 400/220/33 kV substation in Mekhali and approximately 470 circuit kilometers of transmission lines.
Key Facts
- Two power substations, HPTL in Mandya and MPTL in Belagavi, are to be handed over to private companies.
- The operation will be under the Build, Own, Operate, and Transfer (BOOT) model for a set period.
- Resonia Limited is the lowest bidder for HPTL, and Dilip Buildcon Limited for MPTL.
- HPTL and MPTL were initially Special Purpose Vehicles (SPVs) by REC Power Development and Consultancy Limited (RECPDCL).
- The projects involve establishing 400/220/33 kV substations and associated transmission lines.
- KPTCL has recommended that KERC grant transmission licenses to the selected private companies.
- KERC has issued a public notice for objections or suggestions regarding the licenses until September 1.
- A Transmission Service Agreement (TSA) has been executed between HPTL and KPTCL.
Background
According to a KERC official, Karnataka is among the last states to implement such a policy, with approximately 90 similar transmission projects already licensed in other Indian states. The KERC official clarified that this is a transmission license, not a distribution license, and the private companies will operate under a prescribed tariff for a defined term. Ownership may subsequently transfer to a state nodal agency or the contract may be extended based on performance.
The Ministry of Power has reportedly approved the transfer of RECPDCL's shares in HPTL to Resonia Limited and in MPTL to Dilip Buildcon Limited, pending final documentation. KERC is currently reviewing the applications to ensure eligibility criteria are met before issuing the licenses.
Sources reviewed
Project Chintan independently synthesized and analyzed information cross-checked across the sources listed above.
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