Mumbai, July 05: Almost 18 months after Tata Power was chosen as the preferred bidder under the international competitive bidding, PowerGrid Corporation of India (PGCIL) signed the shareholders agreement with the Mumbai-based power major for setting up the 400 kv Tala transmission project, India’s first inter-state transmission project with private sector participation. The transmission line will evacuate power from the 1020 MW Tala hydro-electric project in Bhutan and carry surplus power from the eastern grid to the power deficit northern grid.

Tata Power picked up 51% stake in Tala Power Company, (TPCL), the first JV transmission project in the country, which was thrown open for private participation by the government. TPCL’s transmission lines, which bisect three regions - north east, east and north, will be operational by mid-’06. The project cost is estimated around Rs 1,100 crore.
The delay in signing the shareholders agreement was attributed to the huge project cost, novelty in the concept, voluminous documentation and concerns over PGCIL providing guarantee over payments to Tata Power. The only other pre-qualified bidder for the project was UK’s National Grid. Bureau Report