Promotion of competition in the electricity industry in India is one of the key objectives of the Electricity Act, 2003. As per the provisions under Section 63 of the Electricity Act, 2003 and the Tariff Policy dated 6th January, 2006, Ministry of Power, issued “Guidelines for Encouraging Competition in Development of Transmission Projects” and Tariff Based Competitive Bidding Guidelines for Transmission Services”. These guidelines aim at laying down a transparent procedure for facilitating competition in the transmission sector through wide participation in providing transmission services and tariff determination through a process of tariff based competitive bidding.

As envisaged in the Guidelines, Ministry of Power had constituted an Empowered Committee on Transmission to identify inter-state transmission projects to be developed through competitive bidding and to oversee the process of competitive bidding. Ministry of Power has also issued Standard Bidding Documents (SBDs), viz. Request for Qualification (RfQ), Request for Proposal (RfP), Transmission Service Agreement (TSA) and Share Purchase agreement (SPA). As provided in the Guidelines, Ministry of Power has appointed PFC Consulting Limited (PFCCL) and REC Transmission Projects Company Limited (RECTPCL) as the Bid Process Coordinators (BPC) for carrying out the bidding process.

As far as Inter-State transmission system is concerned, till date thirty-seven projects have been awarded through Tariff Based Competitive Bidding out of which thirteen projects have already been commissioned and twenty projects are under implementation by various Transmission Service Providers. Out of balance four projects, one project has been cancelled by CERC, in one project the TSP has requested for closure and construction of two projects could not start due to litigation. Apart from this, there are six no. of projects which are presently under bidding process.