Under Tariff Based Competitive Bidding (TBCB), private developers compete for greenfield projects by quoting the lowest levelized tariff. The winner becomes a Transmission Service Provider on a Build-Own-Operate-Maintain (BOOM) basis.
The developers build the asset, own it and run it throughout the concession period, typically about 35 years for inter-state projects. STUs remain the overall implementing agencies.
Brownfield upgrades and network strengthening use the cost-plus model, where regulators set tariffs from actual spending plus a return on equity.
Established transmission developers, EPC contractors, equipment suppliers and project-finance lenders all stand to gain. Developers recover investment through tariff payments over the concession, which are typically linked to line availability rather than usage.
Right-of-way disputes, forest clearances, and slow state support can push back commissioning while financing costs run.
Industry experts warn that aggressive bids from small or inexperienced firms can create stranded assets and want strong net-worth criteria.
The single bid for the Ladakh project shows competition is not guaranteed for complex lines. TBCB can lower costs, but only with disciplined bidding and enforcement. There is also a coordination risk specific to the intra-state setting.
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