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Pratik Agarwal, Head Infrastructure Business, Sterlite Technologies Ltd

15 Jul 2014

Pratik Agarwal- Head Infrastructure Business, Sterlite Technologies Ltd, speaks to Neeraj Dhankher about power transmission and power trading issues in the country. Excerpts.

Please tell us a little bit about the situation with the power sector in India today. One often hears a lot of discussion about broad infrastructure in India. Could you tell us a little bit about how you see the state of the industry?

Broadly speaking, the power sector in India has a bright long-term outlook due to double-digit growth in Yearon- Year (YOY) consumption of electricity. However, in the short term there will continue to be challenges in the generation space primarily due to fuel availability and in some cases, unviable Power Purchase Agreements (PPAs). In the medium term, once these two problems are resolved the much larger challenge will be to turn-around the distribution sector and make the power distribution companies (Discoms) financially viable. Without a thriving retail business, the upstream business of generation will continue to struggle. I believe this will be the biggest challenge for the incoming government, and one that will take 4-5 years to resolve that too if tough decisions are made upfront; within first 12 months of the new regime.

Sterlite is also executing multimillion dollar power transmission system project across India. What is the status of the project?

Sterlite has bagged 6 projects from the government of India to deliver over 4000 circuit kilometers of EHV lines across the length and breadth of the country. These projects are spread across 10 states. Our first line has been (partially) charged since September 2013 and has become the critical link between the Eastern Grid and Northern Grid. The balance projects will commission progressively in the coming months. We have faced tremendous challenges in terms of delayed clearances, force majeure events like riots and floods; yet we are proud to say that we will be finishing all our projects in record time. Once completed, our lines will transport 5000 mw of cheap pit-head power from the power rich regions, to the power hungry states. This will have a tremendous impact on power availability in these states, and will also reduce the cost of power dramatically.

What events do you expect in your industry sector over the next few months? Are these hurdles or catalysts?

The power transmission space is going to see an unprecedented growth in the coming five years. The power transmission sector alone will attract an investment of $40 billion in next five years. The next five years could be the inflexion point where India takes the giant leap and comes on similar pedestal as US and China as far as power transmission networks are concerned.

Who is your competition? What differentiates you from them?

There is going to be a huge infrastructure spending in Power sector. Sterlite is uniquely positioned in market to participate in these projects with proven capabilities of delivering end-toend solutions including a comprehensive portfolio of electricity transmission products; electricity transmission network deployment, operation and maintenance. With a Sustained focus on technology and engineering, we are the only company, fully integrated from raw material to product manufacturing to network solution designing and developing infrastructure in the power transmission domain.

What is your take on power transmission and power trading issues in the country? Has it lapped a long way or still it has to go a long way?

It still has a long way to go. In India, considerable amount of consumers are power deprived and there are a lot of Generators like Captive Power Plants (CPPs) that are underutilized. Transmission constraints and congestions hinder the effective connectivity between generators and consumers and hence discourages the power trade between distant locations. There is a need to plan better power transmission networks so that the power hungry states are connected to the generators.