POWERLINKS TRANSMISSION LIMITEDPOWERLINKS TRANSMISSION LIMITED

a a

joint venture of joint venture of

TATA POWER TATA POWER

& &

POWERGRIDPOWERGRID

INDIA ELECTRICITY - 2006

Plenary Session III - TRANSMISSION

May 12, 2006New Delhi

Movie

BackgroundBackgroundBackgroundBackground To evacuate power from Tala Hydro-Electric Project in To evacuate power from Tala Hydro-Electric Project in

Bhutan and surplus power in East and North-East regions Bhutan and surplus power in East and North-East regions to facilitate creation of transmission highway to transfer to facilitate creation of transmission highway to transfer power to the power starved Northern region.power to the power starved Northern region.

Tala hydro-electric Plant being developed by GoI and GoB Tala hydro-electric Plant being developed by GoI and GoB on the near Honka village (3 Kms. on the near Honka village (3 Kms. Downstream of existing Chukha Tail Race)Downstream of existing Chukha Tail Race)

Beneficiary states: Eastern and Northern Region statesBeneficiary states: Eastern and Northern Region states

The total transmission project is being developed by The total transmission project is being developed by Powerlinks and PGCIL.Powerlinks and PGCIL.

To evacuate power from Tala Hydro-Electric Project in To evacuate power from Tala Hydro-Electric Project in Bhutan and surplus power in East and North-East regions Bhutan and surplus power in East and North-East regions to facilitate creation of transmission highway to transfer to facilitate creation of transmission highway to transfer power to the power starved Northern region.power to the power starved Northern region.

Tala hydro-electric Plant being developed by GoI and GoB Tala hydro-electric Plant being developed by GoI and GoB on the near Honka village (3 Kms. on the near Honka village (3 Kms. Downstream of existing Chukha Tail Race)Downstream of existing Chukha Tail Race)

Beneficiary states: Eastern and Northern Region statesBeneficiary states: Eastern and Northern Region states

The total transmission project is being developed by The total transmission project is being developed by Powerlinks and PGCIL.Powerlinks and PGCIL.

River WangchuRiver Wangchu

POWERLINKS Transmission Limited is POWERLINKS Transmission Limited is executing India’s first private sector inter-executing India’s first private sector inter-state transmission project on BOOT basisstate transmission project on BOOT basis

Set up as a 51:49% JV between Tata Set up as a 51:49% JV between Tata Power and POWERGRIDPower and POWERGRID

PGCIL to buy entire transmission capacityPGCIL to buy entire transmission capacity

Fast Track ProjectFast Track Project

TATA Power was selected as JV Partner – 22TATA Power was selected as JV Partner – 22ndnd OCT 2001OCT 2001

Original Schedule as per Feasibility Report- 42 Original Schedule as per Feasibility Report- 42 MonthsMonths

Agreements(Share Holders Agreement / Agreements(Share Holders Agreement / Implementation Agreement / Transmission Implementation Agreement / Transmission Services Agreement) signed--- 4Services Agreement) signed--- 4thth JUL 2003 JUL 2003 (for completing project in 36 Months)(for completing project in 36 Months)

Transmission License Received from CERC -Transmission License Received from CERC -1313thth Nov 2003 Nov 2003

Loan Agreements signed with Loan Agreements signed with IDFC/SBI/IFC/ADB in Jan 2004IDFC/SBI/IFC/ADB in Jan 2004

Fast Track Project---Cont’dFast Track Project---Cont’d

Financial Closure achieved in record time of 10 Financial Closure achieved in record time of 10 months (12months (12thth May 2004) May 2004)

All Major Orders (LOAs) awarded-Dec 03/Mar All Major Orders (LOAs) awarded-Dec 03/Mar 0404

Supplementary Agreements(Implementation Supplementary Agreements(Implementation Agreement and Transmission Services Agreement) Agreement and Transmission Services Agreement) signed after approval of CERC on 07/10/2004signed after approval of CERC on 07/10/2004

Lahmeyer International appointed as Lender’s Lahmeyer International appointed as Lender’s Independent Engineer.Independent Engineer.

ERP for F&A was implemented on 01ERP for F&A was implemented on 01stst Oct 2004 Oct 2004

awarded – Sept 05awarded – Sept 05ISO 9001ISO 9001,, ISO 14001ISO 14001,, ISO 18001ISO 18001

Transmission RouteTransmission Route

A1

A2

A3

A4

A5

1500 MW

3000 MW

LINE CAPACITY

(A6)

Project VolumesProject Volumes::1. Tower Steel:1. Tower Steel: 67500 MT67500 MT

(33400 MT-HT Steel)(33400 MT-HT Steel)(34100 MT-MS Steel)(34100 MT-MS Steel)

2. Reinforcement Steel:2. Reinforcement Steel: 15500 MT15500 MT

3. Concreting:3. Concreting: 1,80,000 CuM1,80,000 CuM

4. Excavation:4. Excavation: 12,12,000 CuM12,12,000 CuM

5. Total Circuit kms:5. Total Circuit kms: 23422342

6. Total Towers:6. Total Towers: 3152 nos.3152 nos.

7. Total Conductor:7. Total Conductor: 22000 kms.22000 kms.

8. Total Insulator Strings8. Total Insulator Strings 24500 nos.24500 nos.(As per original B.Q.)(As per original B.Q.)

1.1. 400 kV Siliguri – Purnea Line 400 kV Siliguri – Purnea Line

(Completed)(Completed)

2. 400 kV Purnea – Muzaffarpur 2. 400 kV Purnea – Muzaffarpur (Completion expected : end May 2006)(Completion expected : end May 2006)

3. 400 kV Muzaffarpur – Gorakhpur3. 400 kV Muzaffarpur – Gorakhpur

(Completed)(Completed)

4. 400 kV Gorakhpur – Lucknow4. 400 kV Gorakhpur – Lucknow (Completed)(Completed)

5. 400 kV Bareilly - Mandaula 5. 400 kV Bareilly - Mandaula (Energised-1(Energised-1stst May 2006) May 2006)

66. . 220 kV220 kV Muzaffarpur – Muzaffarpur Muzaffarpur – Muzaffarpur (Completed)(Completed)

- 1- 1stst July 2006 July 2006

- 1- 1stst April 2006 April 2006

Agreed Commercial Operation Dates Agreed Commercial Operation Dates (CODs)(CODs)

Cost DetailsCost Details

Rs. 1100 Crores – Original cost as approved by CCEA on 2nd July, 2003 based on August, 2002 level

Rs. 1220 Crores – Project Cost based on August, 2002 level and considering the awarded price for Tower packages. This cost was considered by the Lenders for signing the Loan Agreements

– This Revised Cost Has Been Approved By Govt. Of IndiaRs. 1600 Crores

Cost DetailsCost Details

Initial Project Cost is Generally Based On Walk-Over Survey Data (Line Length & Type Of Terrain, Major Crossing etc.)

At FR Stage Cost is Calculated Based On Survey Data and Prevailing Budgetary Cost of Equipments / Services.

Before Tendering,Cost is Updated Based On Preliminary Survey Data (Detail BOQ) and Escalation, If any

Cost Details – Final Completed Cost Details – Final Completed Project CostProject Cost

Final Completed Project Cost is Arrived At By :

Initial Project Cost (FR Cost)

Plus

Escalation On Material Cost

Plus

Other Costs

Major Constituents of Major Constituents of Transmission Line JV ProjectsTransmission Line JV Projects

Government

Project Promoters

Financiers

Government:-Government:-Policy & Regulatory Framework to Spell Out:

Debt:Equity Ratio and

Procedure For Approval Of Completed Project Cost

Legal Framework to Deal With ‘Non Payment’ Of Dues

Return On Equity

Procedure For Getting Clearances From Other Departments

Avoidance of multiple taxes

Available tax incentives to be extended sufficiently in advance

Project PromotersProject Promoters

Should assess all and business opportunities upfront

Security mechanism towards transmission service payments

‘Risk Factors’

FinanciersFinanciers

Financiers Must Evolve Simple and Clear-cut Instrument for Project Appraisal (Particularly For Transmission Project), Risk Mitigation (Particularly Insurance of TL Asset Against Loss Of Revenue/ Business)

Simplification of documentation

Learnings from our experienceLearnings from our experienceLearnings from our experienceLearnings from our experience

1. Pre Award Activities1. Pre Award Activities1. Pre Award Activities1. Pre Award Activities

Scope for Scope for ImprovementImprovementScope for Scope for

ImprovementImprovement OKOKOKOK

1.2. Surveying1.2. Surveying1.2. Surveying1.2. Surveying

1.3. Estimation1.3. Estimation1.3. Estimation1.3. Estimation

1.4. Tendering & Award Placement1.4. Tendering & Award Placement1.4. Tendering & Award Placement1.4. Tendering & Award Placement

2. Post - Award Activities2. Post - Award Activities2. Post - Award Activities2. Post - Award Activities

2.1. Project Management2.1. Project Management2.1. Project Management2.1. Project Management

2.2. Engineering Activities2.2. Engineering Activities2.2. Engineering Activities2.2. Engineering Activities

2.3. Field Activities2.3. Field Activities2.3. Field Activities2.3. Field Activities

Scope for Scope for ImprovementImprovementScope for Scope for

ImprovementImprovement OKOKOKOK

2.3.1. Preparation of Ground Profile2.3.1. Preparation of Ground Profile2.3.1. Preparation of Ground Profile2.3.1. Preparation of Ground Profile

2.3.2. Tower Spotting2.3.2. Tower Spotting2.3.2. Tower Spotting2.3.2. Tower Spotting

2.3.3. Foundation2.3.3. Foundation2.3.3. Foundation2.3.3. Foundation

2.3.4. Site Store Management2.3.4. Site Store Management2.3.4. Site Store Management2.3.4. Site Store Management

2.3.5. Tower Erection : Technical2.3.5. Tower Erection : Technical

: Safety: Safety

2.3.5. Tower Erection : Technical2.3.5. Tower Erection : Technical

: Safety: Safety

2.3.6. Stringing : Technical2.3.6. Stringing : Technical

: Safety: Safety

2.3.6. Stringing : Technical2.3.6. Stringing : Technical

: Safety: Safety

Learnings from our experienceLearnings from our experienceLearnings from our experienceLearnings from our experience

To sum up…To sum up…To sum up…To sum up…

This is the first transmission project in This is the first transmission project in Private sector, which has already set Private sector, which has already set

precedence for other projects to follow. precedence for other projects to follow. To make this project a big success, it is To make this project a big success, it is

essential that all the concerned agencies essential that all the concerned agencies including promoters, company, partner including promoters, company, partner contractors & government regulatory contractors & government regulatory

body join hands in removing the body join hands in removing the obstacles for transmission sector to obstacles for transmission sector to

tread on a new path.tread on a new path.

This is the first transmission project in This is the first transmission project in Private sector, which has already set Private sector, which has already set

precedence for other projects to follow. precedence for other projects to follow. To make this project a big success, it is To make this project a big success, it is

essential that all the concerned agencies essential that all the concerned agencies including promoters, company, partner including promoters, company, partner contractors & government regulatory contractors & government regulatory

body join hands in removing the body join hands in removing the obstacles for transmission sector to obstacles for transmission sector to

tread on a new path.tread on a new path.

Thank You!Thank You!Thank You!Thank You!