Bhopal Dhule Transmission Company Limited

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On 31st January 2011, Power Finance Corporation (PFC) awarded a concession of 35 years (including construction period of 3 years starting from the date of grant of Transmission License) to M/s Sterlite Transmission Projects Private Limited, for the development of the 910km 760kv single-circuit transmission and 80km of 400kv double-circuit transmission project,in the states of Madhya Pradesh, Gujarat, and Maharashtra. The western region interconnection mega transmission project was aimed at system strengthening of western region transmission grid through two sections - Vadodara-Dhule-Aurangabad line and Indore-Bhopal-Jabalpur line, with two1500 MVA substations at Dhule and Bhopal. Given the huge potential of thermal power in Eastern, Central coal-rich states, power transfer to meet the long term power transfer requirement i.e. next 10-15 years. Bhopal Dhule Transmission Company Limited (BDTCL) was incorporated on 8th September, 2009. PFC Consulting Limited (subsidiary of PFC) conducted the bid process for the SPV, Bhopal Dhule Transmission Company Limited (BDTCL). The SPV had been formed to undertake preliminary survey work, identification of route, preparation of Survey Report, initiation of the process of land acquisition (if required), initiation of process of seeking forest clearance(if required) and to conduct the bidding process. 21 Long Term Transmission Customers (LTTCs) - Sterlite energy Limited, GMR Kamalanga Energy Limited, Navbharat Power Limited, Monnent Power Company Limited, Jindal India Thermal Power Limited, Lanco Babandh Power Limited, Ind Barat Energy (Utkal) Limited, MB Power (Madhya Pradesh) Limited, RKM Powergen Limited, Athena Chandigarh Power Limited, Jindal Power Limited, SKS Power Generation (Chhattisgarh) Limited, Korba West Power Company Limited, DB Power Limited, Visa Power Limited, KSK Mahanadi Power Company Limited, Bharat Aluminium Company Limited, Vandana Vidyut Limited, LANCO Amarkantak Power Limited, GMR Chhattisgarh Energy Pvt. Limited, Chhattisgarh State Power Trading Company Limited with power plants across Madhya Pradesh, Chattisgarh, Gujarat, Maharashtra, Orissa, were to enter into Transmission Service Agreement (TSA) with the successful bidder. 22 biders had shown interest in the RFQ stage, out of which 15 got qualified for the RFP stage. Only 9 bidders offered their financial bids. Sterlite Transmission Projects Private Limited (subsidiary of Sterlite Group) won the bid by quoting the lowest levelized transmission charges of USD 43.6mn per annum (INR 1995.30mn @45.73 USD/INR). The L2 bidder - Ashoka ICOMM Consortium had quoted INR 2184.75 mn/year and L3 bidder - Lanco Infratech Limited had quoted INR 2448.90 mn/year respectively.The SPV Bhopal Dhule Transmission Company Limited was subsequently transferred to Sterlite on 31st March 2011. The tranmission license was awarded by CERC on 12th October 2011 for a period of 25 years (to be extended on request before the expiry of the license period). Adoption of Transmission Charges and grant of Transmission License by CERC was done on 28th October, 2011.The tariff adopted for the transmission system was valid for a period of 35 years. The tariff of the transmission assets beyond the period of 35 years were to be governed in accordance with the provisions of CERC Regulations. The tariffs or the Transmission Service Charges (TSC) comprised of a non-escalable component and an escalable component linked to inflation index as notified by CERC (Central Regulator). Full TSC as per the quoted tariff structure were payable to BDTCL by the counterparty utilities subject to availability of the transmission lines at normative level of 98%. As mentioned in PTA, a payment security mechanism was in place which comprised of a) revolving Letter of Credit (for 105% of monthly TSC), and b) right for request to RLDC (Regional Load Dispatch Centre) for diversion of low cost power available to defaulting state utility in the peak time (7 to 10 pm) so that du