Maharashtra Eastern Grid Power Transmission Company Limited

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On 15th February 2010, Adani Enterprises Limited (AEL) had formed Maharashtra Eastern Grid Power Transmission Company Limited (MEGPTCL), a joint venture company with Maharashtra State Electricity Transmission Company Limited (“MSETCL”), to build, own and operate a Tiroda–Koradi–Akola–Aurangabad transmission system/network for evacuation of power generated by power plants located in north-eastern Maharashtra (consisting of five power plants with total capacity of about 8100 MW by year 2013-14). AEL held 74% and MSETCL held 26% of the equity capital of the JV Company. The transmission project comprises 2 Single Circuit 765 kV lines each of 630 km, one 400 kV Double Circuit (DC) line of 30 km (total 1290 kms) and substations on the eastern part of Maharashtra -Tiroda, Tidangi, Akola and Aurangabad.The project formed part of the Maharashtra intra-state transmission system. The route of transmission lines would pass through the districts of Gondia, Bhandara, Nagpur, Wardha, Amravati, Buldhan, Jalna & Aurangabad of Maharashtra.The proposed 765 kV intra-state transmission network would strengthen the power evacuation system of Maharashtra and shall improve the security and reliability of intra-state transmission system. Maharashtra Eastern Grid Power Transmission Company Limited (MEGPTCL) entered into a transmission development agreement with MSETCL (“TDA”) for the development of transmission systems and networks. MEGPTCL also entered into a bulk power transmission agreement with MSEDCL and MSETCL (“BPTA”) for evacuating the power generated by the power plants. The BPTA was valid for a period of 25 years from the date of execution or for the period of the transmission license whichever was longer. The Maharashtra Electricity Regulatory Commission on 21st September 2010 had issued a transmission license, valid for 25 years, to MEGPTCL for establishing transmission lines as envisaged in the TDA. As per BPTA, MEGPTCL had the responsibility to procure and maintain all the consents required to erect the tranmission assets and to maintain and repair the transmission system as required by BPTA. MSEDCL would pay transmission tariff in accordance with the tariff orders issued by MERC from time to time under a Multi-Year Tariff framework (MYT) (vide Maharashtra Electricity Regulatory Commission (Terms and Conditions Tariff) Regulations, 2005). Maharashtra Eastern Grid Power Transmission Company Limited (MEGPTCL) was awarded the license to construct this transmission project on a negotiated basis. While the said transmission lines had been planned by STU (MSETCL) and included in their State Transmission Network Plan 2008-09 - 2012-13, AEL had expressed willingness to develop the transmission system as “Transmission Licensee” in order to ensure its completion, matching with the first unit of Adani Power's Tiroda thermal Power project. State Transmission Utility (MSETCL had requested AEL to undertake construction of the above transmission system. As the said transmission lines had not followed development under the Competitive Bidding Guidelines issued by the Ministry of Power, MERC (Regulator) held that all the expenditure made on the Intra-State Transmission system was finally recovered from the Transmission System Users (TSU), as per the “pooled cost” concept. Hence, it was essential to take every step to optimize on the costs to be incurred in development of the projects. Hence MERC instructed that MEGPTCL would be following a transparent competitive bidding process for development of the transmission project to ensure that the cost of the project was the most reasonable and most competitive. In pursuance of this, in October 2010 MEGPTCL awarded the competitively bid EPC contract to PMC Projects (India) Private Limited. The project reached financial closure on 17th August 2012. The total cost of the project estimated at the time of financial closure was USD 882.3million (INR 47150mn @53.44 INR/USD). The debt equity ratio of the project