Aatmja Kumari(Intern Journalist): In order to increase the private sector’s participation in the transmission sector, the central government has relaxed the rules. The government has allowed investors to exit the project by selling their entire stake in the secondary market, 1 year after the project’s commercial operation started. The Union Ministry of Power has reformed the standard bidding document for the selection of transmission service providers for the inter-state transmission network.
Under this reform, an investor’s shareholding in Special Purpose Vehicle (SPV) will remain locked for only 1 year after the commercial operation of the winning project starts. The first lock-in period was two years. Under the amendment, the total shareholding of the selected bidder in the SPV should not be less than 51% from the commercial operation date (COD) of the projects to 1 year.
From the first commissioning date to two years, there was a rule to keep the elected bidder’s share in SPV at least 51%. Similarly, for 3 years this stake was to be held at least 26%. According to earlier rules, the investor had to wait for at least 2 to 5 years to exit the project completely.
The Ministry of Power also relaxed the consortium rules for transmission projects. Now any member other than the consortium’s lead member can sell his stake at any time, provided the remaining members hold the minimum shares. Under the earlier rule, any member of the consortium could sell its stake at any time, provided all other members, including the lead member, hold at least a 51% stake in the project for the first two years and at least 26% stake in the third year.
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