Power Grid Plans Capital Expenditure Of Rs 25,000 Crore For FY18
Of the Rs 25,000 crore, the company plans to raise Rs 17,500 crore through debt, Power Grid says.
State-run Power Grid Corporation of India Ltd. has planned a capital expenditure of Rs 25,000 crore in the financial year 2017-18.
“We have been aggressively expanding and participating in all possible opportunities,” IS Jha, chairman and managing director of Power Grid told BloombergQuint. “For the current fiscal, we have planned a capex of Rs 25,000 crore and we will raise nearly Rs 17,500 crore through debt,” he added.
The capex in the previous financial year stood at Rs 24,400 crore.
Project Execution
Jha said the company already has Rs 1.30 lakh crore worth of projects on hand which it will have to execute over the next three to four years.
The company is aggressively participating in the government’s 24,000 route kilometre railway electrification project. Power Grid has received an order to electrify 770 route kilometers of this project. “We are implementing this as depository work, meaning all expenditure will be done by Indian Railways. We will implement it and get a consultancy fee of 8.5 percent,” Jha said.
The work on this project will start in June and the first phase will be completed in a year, he added.
The Rs 20,000 crore worth of solar and wind projects which are likely to come up, is also a growth opportunity.
About 45 percent of power generated in India is transmitted through Power Grid. The company currently has 1081 transmission lines, which is about 139,709 circuit kilometers while 220 substations amounting to 292,543 MVA (mega volt amp).
Fund Raising Plans
Power Grid plans to raise funds through issue of bonds both domestic and international and also through bilateral and multilateral funding sources and forex borrowings.
“We are also looking at raising funds through masala bonds. We keep evaluating all the options for raising funds and as and when we require we do it,” he said. Jha said apart from the current areas that the company is operating including transmission and telecom, it is also exploring opportunities in battery storage and setting up vehicle charging stations.
Employee Costs Weigh On Earnings
The state-owned power transmission company's net profit in the fourth quarter grew 22 percent over the last year to Rs 1,916.4 crore. Revenue from operations went up 17 percent to Rs 6,712 crore.
Employee benefit expenses almost doubled to Rs 537.4 crore. Employee costs increased to 8 percent of the total sales. This led to 60 percent rise in total costs for the company which dragged the operating margin.
Jha said the company had to make higher provisions this quarter for salary revisions on account of the implementation of seventh pay commission.
With inputs from PTI