Critically evaluate the mix of Tariff Based Competitive Bidding and cost-plus models in India's transmission sector with reference to recent schemes.

India builds transmission lines in two ways. Under Tariff Based Competitive Bidding (TBCB), developers compete to offer the lowest tariff. Under the cost-plus model, approved costs plus a return are recovered through tariffs. PM-DHARA (GEC-III) was approved with Rs 1,86,405 crore to evacuate up to 135 GW of RE, and it formally combines the two models [1]. The design is sound, but it has not yet been tested at this scale.

The mix in recent schemes

• PM-DHARA: new (greenfield) intra-State lines go through TBCB, with private Transmission Service Providers on a BOOM model. Upgrades of existing (brownfield) networks use the cost-plus basis. STUs remain the overall implementing agency [1].
• Under InSTS GEC-II, STUs received 33% Central Financial Assistance [2]. Central support under PM-DHARA is about 29% of the outlay [1].

Strengths

• Price discovery: competition reveals efficient tariffs and brings in private capital, which eases pressure on State finances [1].
• Risk transfer: under BOOM, the TSP carries construction and maintenance risk instead of the STU.
• Practical carve-out: upgrades inside live substations have an uncertain scope, which makes them hard to bid out. Cost-plus lets the STU already running the network do this work [1].
• Scale: 135 GW is far above the ~24 GW commissioned across GEC-I and II [3], so STUs alone cannot deliver it.

Weaknesses

• The procurement model does not fix execution: only 58% of targeted lines were added in 2024-25 [4]. Right-of-way, land, clearances and route changes cause delays [5], and bidders build these risks into their tariffs.
• Counterparty risk: DISCOMs make losses because of below-cost tariffs and high T&C losses [4]. If they pay late, TBCB tariffs rise.
• Cost-plus incentives: assured returns weaken cost discipline, and "network strengthening" can be stretched to avoid bidding.
• Weak oversight: a Standing Committee criticised MNRE's monitoring [6]. PM-DHARA names no monitoring body [1].

Way forward

• Uniform RoW compensation and a single clearance portal [5].
• Published criteria for what counts as greenfield or brownfield, and regulatory audits of cost-plus spending.
• Payment security for TSPs through DISCOM reform.

Overall, the hybrid matches each model to the right type of project: competition where the scope is clear, regulated cost where it is not. Its success will depend more on land, clearances and DISCOM health than on the model chosen. With clear rules on project type and firm monitoring, transmission can support India's 900 GW non-fossil target by 2035 [1] rather than hold it back, advancing SDG 7.