The Cabinet of Ministers has approved the award of a contract to build and expand two grid substations at Sampur and Kappalthurai to a joint venture of Ceylex Engineering (Pvt) Ltd and Xingneng Electric Power Construction Co. Ltd.
The contract is worth USD 4.15 million, EUR 0.78 million and Rs. 1,096.08 million, excluding taxes, according to the Cabinet decision announced on Tuesday.
The Sampur–Kappalthurai Transmission Infrastructure Development Project involves building a new 220(132)/33 kV solar power grid substation at Sampur and expanding the existing 220(132)/33 kV substation at Kappalthurai. The Cabinet decision says the work is meant to strengthen the national electricity transmission network and keep the power system running efficiently.
The project is financed with assistance from the Asian Infrastructure Investment Bank (AIIB).
Six bids were received under the International Competitive Procurement procedure. After evaluating them, and on the recommendation of the High-Level Procurement Committee, the Cabinet approved a proposal by the Minister of Energy to give the contract to the lowest substantially responsive bidder, the Ceylex Engineering and Xingneng Electric Power Construction joint venture.
Background
The Cabinet first approved the project on 15 December 2025. Bids were then invited from contractors under the competitive procedure that applies to large publicly financed works, which led to Tuesday’s decision.
A grid substation is the facility where electricity is transformed between voltage levels so it can move from power plants onto the transmission network and then on to local distribution lines. The figures in the decision, 220(132)/33 kV, describe the voltage levels the equipment at the two sites is designed to handle.
Sampur, in the Trincomalee District of the Eastern Province, is also the location of the 120 MW Sampur Solar Power Project. India’s Deputy High Commissioner Maitrey Kulkarni visited that site on Tuesday, according to Newswire.
Multilateral lender financing such as the AIIB assistance used here normally comes with its own procurement rules, which is why the contract went through an international tender rather than a direct award.
What it means
The substations are part of the transmission system through which electricity generated in the country reaches homes, businesses and industry. A stronger transmission link in the Trincomalee area is intended to help the grid carry power from solar generation in the region, according to the way the project is described in the Cabinet decision.
The decision does not say when construction is expected to start or finish, and the figures given exclude taxes. Readers should not read the contract value as a direct change to electricity tariffs, which are set through a separate process.
