Procurement is predominantly a state subject. With this one-nation-one-grid drive coupled with efforts for making state discoms healthy, initiatives towards renewable power capacity addition and 100 per cent FDI indicates positive outlook.

How do you assess the current market scenario in terms of EPC business?
Today the market is actually dried up in terms of new opportunities in the market and fresh investments for infrastructure development is almost choked up, especially private investments. However, there are number projects in the pipeline but that too facing uncertainty at present. For example, in T&D segment, the government plan of procurement guideline under TBCB i.e tariff based competitive bidding plan, is predominantly occupied by PGCIL— with about 40-45 per cent share—remaining goes to private sector players. Power Grid is less troubled because it has its capex plans and finance arrangements in place for their projects and it is moreover de-stressed from financial issues, whereas when it comes private players, there are issues related to financing the projects.

How do you see it for tomorrow?
It can’t be denied that the government has taken couple of initiatives that might change the scenario in positive way for the market, given that reforms in place with proper synergy between state and central policies. For example, the government is planning for “one-nation-one-grid”, the intents are very clear that they are trying to bring the national assets under a single roof with this drive. Why it is being done because many of the decision makings are not central subjects. These decisions are more of state subject under federal arrangement. For example, procurement is always a state subject not a central subject. Now, we do not have single procurement guidelines applicable all across the country. Procurement is predominantly a state subject. With this one-nation-one-grid drive, the effort is there for conducive reforms. So, this initiative coupled with heath of state discoms and initiatives towards renewable power with 100 per cent FDI indicates positive outlook if we talk about power sector. In addition, government’s smart city plan and push for infrastructure development will bring opportunity. There is some kind of relief by ease in corporate tax.

However, from my point-of-view, the Indian government’s enhanced push on renewable energy is expected to be a potential game-changer for the sector. With the fast rate of RE capacity addition, the transmission planning will be of utmost importance, in order to enable the flow of renewable energy into the National Grid Network. On these lines, government has already initiated work on the first Green Energy Corridor of India, and I anticipate a significant volume of work coming from Green Energy Corridors in the next 3-4 years.

How technology innovation and digitalisation is transforming project execution?
On the project execution front, technology is promoting cost and time optimisation of projects. LiDAR is being used for surveying, cloud-enabled software for mapping the geographical contours, which help attain high level of line-route optimisation (in transmission line projects) and radically improve the productivity as compared to conventional methods. UAVs, drones are being used for conductor stringing activities, cutting down the time durations multi-fold. Building Information Modelling (BIM) is being actively used to virtually design and simulate projects in 3D and reduce re-work by detecting possible clash points up front. Advanced project management tools are helping EPC companies to micro-plan and effectively monitor the projects and achieve a high degree of resource and cost optimisation.

Another aspect of the transformation in the Indian power sector is digitisation and automation. While we have covered good ground on digitisation of generation assets and transmission infrastructure through systems such as SCADA and GIS. I can certainly see government’s strong impulsion towards this direction. Initiatives such as National Smart Grid Mission (NSGM), UDAY, IPDS and Smart City Mission are driving the efforts towards making the grid ‘smart’. Under NSGM, the Smart Meter National Programme (SMNP) – being coordinated by EESL, aims at replacing 250 million existing conventional meters with smart meters across India. The smart grid is expected to optimise operational efficiencies, analyse load patterns, help in managing peak loads and improve the quality of power. The system shall facilitate efficient outage management and remote asset performance tracking.

And how this is creating space in overall EPC segment?
The competitive bidding process for inter-state projects has resulted in lower tariffs and faster project execution. This calls for innovations on the EPC front that focus on addressing cost and time elements. Among the intra-state projects, we observed an increased participation from local EPC players; quality control in such projects becomes an important feature as the aggressive bidding presses back the project finances leading to project construction quality issues. Also, if we talk about the Reverse Auction (RA) process, we need to re-look the way it is happening within the industry. It is important to reorganise the framework for bidder assessment, qualification criteria, and focus more on the industry players, who are credible and really bring value with quality and long term sustainability. With cost, time and quality elements being of essence for EPC players, faster innovation adoption becomes one of the important features for maintaining a sustained competitive advantage in the transmission line market. Also, power generation is expected to be driven by renewable energy, especially solar in near future. These projects have shorter construction timelines, as short as six months; and the transmission infrastructure needs to commensurate with the RE project timelines, which in turn ensues innovation in design and construction technology. EPC players with a high degree of mechanisation, digitisation and enhanced project management techniques seem well-placed to take on such challenges.

Neeraj Nanda, President – South Asia (T&D, Solar), KEC International Ltd.

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