The Ministry of Power has advised Power Grid Corporation of India Ltd (PGCIL) to let go of the role of the country’s Central Transmission Utility (CTU).

To implement this advisory, PGCIL will be immediately setting up a CTU as a new 100 per cent subsidiary of the public sector undertaking.

This new subsidiary will be separated into an entity, which will be wholly owned by the Government of India within the next six months or till completion of formalities for its creation, a significant government order on Wednesday evening said.

This new entity will be responsible for carrying out statutory functions, as identified for a CTU under the Electricity Act, 2003, and other functions assigned to it by the Central Electricity Regulatory Commission.

This is a significant development as private power transmission infrastructure development companies were apprehensive of PGCIL holding the dual mantle of a CTU and a project development company as well. In multiple representations, the private power transmission infrastructure development companies said that there was conflict of interest when PGCIL called for tenders and then also participated in them.

Shares of PGCIL closed 1.82 per cent lower at ₹159.50 a scrip on the BSE on Wednesday.