ANDHRA PRADESH POWER CO-ORDINATION COMMITTEE · ANDHRA PRADESH POWER COORDINATION COMMITTEE From The Chief Engineer/IPC & PS, APPCC, Vidyut Soudha Hyderabad To The Secretary/APERC,

ANDHRA PRADESH POWER COORDINATION COMMITTEE

FromThe Chief Engineer/IPC & PS,APPCC, Vidyut SoudhaHyderabad

ToThe Secretary/APERC,4th & 5th Floors,# 11-4-660, Singareni Bhavan,Red Hills, Hyderabad-500 004

Lr.No.CE/IPC & PS/SE(IPC)/DE(T)/F.DBFOO/D.No.200/2015, dt: 26 .10.2015.

Sir,

Sub:- APDISCOMS proposal for Long Term Power Procurement of 1000MW underDBFOO basis from power stations using imported coal from captive coalmines as fuel – Request for approval of deviations proposed in the modelRFP documents - Reg.

Ref:- 1) No. 23/09/2014–R&R, Government of India, Ministry of Power dated 5th

May 20152) Lr.No. APERC/J.D (PPP)/ E.630 / D.No.509/2015, Dt. 20.08.2015

***

With reference to the subject matter, APSPDCL had approached the Hon’ble

Commission for the approval of the tender for “Procurement of Electricity for 1000 MW

capacity under long term for a period of 12 years by APDISCOMS on DBFOO basis from

power stations using 100% imported coal as Fuel”.

APDISCOMS had sought approval of deviation in RFQ and the same had been

approved by Hon’ble commission in the letter cited above in Ref 2nd . Further, Hon’ble

commission granting flexibility to the APDISCOMs in curtailing the requisite capacity

within 2400 MW ( Already approved by the Commission).

Thus, APDISCOMS initiated the tender process and issued RFQ dated 23rd March

2015. The APDISCOMS completed evaluation of applications received in response to RFQ

on 10th June 2015. Finally four pre-qualifiers were selected for further participation in

the RFP stage.

The APDISCOMS issued draft RFP Documents i.e. RFP and PSA on 6th October 2015

and pre-bid conference was conducted on 16th October 2015 to seek the comments the

various bidders on the provisions proposed by the Utility. After review and detailed

analysis of the various requests made by the Bidders, the APDISCOMS have undertaken

certain changes to the model documents published by the Ministry of Power in the

interest of ensuring competition as well as optimizing procurement costs and

minimizing supply risk to the DISCOMS and its consumers.

In the letter referred above, Ministry of Power has directed Distribution

Licensees to take state commission’s approval on any deviation in bidding document

from the Standard Bidding Document.

Hence, therefore, the APDISCOMS now seek the approval of the Hon’ble

Commission on the following deviations proposed to the model document.

RFP Document

(i) Deviation 1: Bringing more clarity in the RFP document

In the pre-bid conference many bidders raised issue of lack of clarity in the

tariff quote if the tariff is inclusive of transmission charges, losses and taxes.

Again clauses related Tie-breaking in the current document are not exhaustive.

Relevant clauses have been modified to accommodate these changes.

(ii) Deviation 2: Seeking more information related to Bid parameters

Article 21 and 22 of PSA requires many other information required for payment

which has not been asked in the RFP Bid format given in Appendix I of RFP. So

additional information has been asked in the form. It should be noted that this

does not alter the evaluation process.

PSA Document

(i) Deviation 1: Bringing more clarity in the PSA document

This includes, clarity on supply period, transmission charges, loss figures,

testing, fuel transportation, dedicated fuel, SHR, contracted capacity and

payment.

(ii) Deviation 2: Removing provision of extension of contract post predefined

supply period of 12 years

Utility believes the state shall have sufficient power from state and central

generation plants by the end of 12 years. Considering the DBFOO model and

imported fuel based tender, Utility is exposed to foreign dynamics. So

upfront, the Utility wants to clarify that there is no provision of extension in

the contract.

(iii) Deviation 3: Expediting events and milestones defined in the PSA so that the

power can be supplied on Scheduled COD i.e. April 1st 2016

Most of the plants, that have participated, are either commissioned or at

advanced stage of completion. So Utility has set timeline for conditions

precedents, document submission aggressively without causing any

inconvenience to bidders.

(iv) Deviation 4: Open access is sole responsibility of supplier

Open access for evacuation of power for contracted capacity for the is

considered as obligation of supplier as the Utility has repeatedly underscored

from time to time the requirement of Energy from Scheduled COD which is

just few months away from Agreement sign.

(v) Deviation 5: Reducing normative availability of the plant from 90% to 85%

considering the uncertainty in the imported coal

The normative availability has been reduced from 90% to 85% considering the

uncertainty and risk associated in the imported coal. Clauses related to this

has been modified.

(vi) Deviation 6: Removing provision of Open Capacity

Utility and Supplier community have found the provision of Open capacity

very complex. Utility believes that the tariff may increase if this provision is

retained. Considering all these factors, clauses related to Open capacity has

been removed.

(vii) Deviation 7: Removing clauses irrelevant to this particular tender

Project specific clauses such as those related to monitoring construction are

irrelevant as all plants participating in the Bid are either commissioned or in

advanced stage of the completion. Similarly clauses related to concessional

fuel are irrelevant.

(viii) Deviation 8: Waiving Fixed Charge payment by the Utility to supplier

In case supplier is able to sell unutilized contracted capacity in the open

market, Utility shall waive Fixed Charge payment for the corresponding

capacity. At the same time, Utility has decided to remove revenue sharing

clauses to create a fair system.

(ix) Deviation 9: Clarifying SHR related clauses

In the pre-bid conference, all of the bidders raised issue of very complex

provisions related SHR. The Fixed charge (incentive and penalty) is computed

quarterly depending on SHR. This cumbersome process for bidding, billing and

payment. So the relevant clauses have been modified. Again these clauses are

relevant for projects which are starting construction post PSA sign and not for

those which has already commissioned or at the advance stage of

construction.

(x) Deviation 10: Removing provision of deemed availability of non-availability

due to shortage in fuel stock

As the fuel is imported from either captive coal mine or through long term

contract, Utility cannot expose itself to foreign risks. So clauses related to

deemed availability has been modified.

(xi) Deviation 11: Adding provisions to collect more documentary evidences from

suppliers to confirm readiness of plant and actual cost during operation

In these clauses, the Utility has asked Suppliers to provide information like

financial details, fuel supply details from time to time.

(xii) Deviation 12: Adding clauses so that the Utility in no case pays more than the

actual cost borne by the supplier

In the current DBFOO model, the fuel charge is passed on to the Utility. To

restrict the Suppliers to pass on extra burden to Utility over and above what it

has quoted in RFP stage, Utility has modified certain clauses.

(xiii) Deviation 13: Ensuring dispute resolution by state commission early in the

stage

The Utility has changed dispute resolution clauses to seek intervention from

commission at the earliest stage of dispute to reduce unnecessary loss of

time, money and energy. In line with this, clause related to Arbitration has

been removed.

(xiv) Deviation 14: State Government owned engineer may be appointed as

Utility’s Engineer

As most of the plants are either commissioned or at the advanced stage of

completion, the role of Utility’s engineer who is expected to monitor

construction and O&M of the plant is very limited. So, to reduce DISCOM’s

burden, Utility has decided to appoint its own engineer for this task.

(xv) Deviation 15: Other changes

Other minor changes related to FSA, Utility’s obligation, pre SCOD schedule,

GCV definition ant etc. have been included in this section.

The detailed explanation in respect of the above deviations is herewith enclosed

as annexure.

As the Hon’ble Commission aware that commencement of power supply to

APDISCOMs under this bidding route is 01.04.2016. As per the PSA, both supplier and

procurer shall fulfill the certain conditions precedent before supply date. As such the

APDISCOMs shall issue the LOA to the successful bidder by the end of November, 2015.

In light of the above submissions, the Hon’ble Commission requested to grant

the approval at the earliest for the deviations proposed to the Standard Bidding

Document as per the Annexure.

Yours faithfully,

Encl: Annexure as stated

Chief Engineer/IPC & PS.

Annexure I - Deviation in RFP Document

Deviation 1: Bringing more clarity in the RFP documentSl Clause/ Section Content Justification1 1.2.6 Bids are invited for the Project on the basis of a tariff to be offered by a Bidder for and in

respect of the Project. For the purposes of evaluation hereunder, the Fixed Charge at Point ofGrid, and Fuel Charge at Point of Grid and Transmission Charge and losses from Point ofGrid to Point of Delivery. Transmission charges and losses shall be computed as on biddue date. will constitute the tariff for the Power Station (the “Tariff”). The contract periodshall be pre-determined and specified in the Bidding Documents.

1. As per the current provisions of theMPSA, tariff is implicit of transmissioncharges and losses on the Bid Date andUtility shall reimburse transmissioncharges and losses any variations from thevalues prevailing on the Bid Date.

2. Since as per the model PSA, Fixed Chargeis subject to a reduction of 2% per annum,element of transmission charges and losseswhich are incompass in the Fixed Chargeare also subject to this reduction leading toan under-recovery for the bidders. Thismay lead to the Bidders loading the unde-recovery upfront.

3. Hence, transmission charges have beende-linked from fixed charge and actualtransmission charges and losses incurredwill be borne by the utility andtransmission charges shall be reimbursedto the supplier upon submission of bills

4. However, since in order to evaluatebidders on total landed cost basis,transmission charges are included forevaluation purposes

The proposed deviation is inline with theearlier case-1 approach as well as the ongoingpractice with other PPAs and hence isadministratively simpler to both parties

2 3.3.2 In the event that two or more Bidders quote the same amount of Tariff for (a) the full CapacityRequired; (b) one full Capacity Required and other part of the Capacity Required; (c) Capacitytotaling more than the Capacity Required and (d) Capacity totaling to the Capacity Required

1. Currently the RFP doesn’t cover ascenario where tariff is the same,offered capacity is the same and

(the "Tie Bidders"), the Utility shall identify the Selected Bidder under (a) by draw of lots,which shall be conducted, with prior notice, in the presence of the Tie Bidders who choose toattend; under (b) by declaring the Bidder who has offered full Capacity Required as theSelected Bidder; under (c) by declaring the Bidder with maximum Capacity as first SelectedBidder and other Bidder as second Selected Bidder with remaining Capacity; in case thecapacity is same, by draw of lots, which shall be conducted, with prior notice, in thepresence of the Tie Bidders who choose to attend and under (d) by declaring both theBidders as the Selected Bidder with respective Capacity.

cumulative offered capacity is greaterthan equal to capacity required.

2. In the above scenario, selection ofLowest Bidder shall be by draw of lotsand the balance capacity shall beawarded to the other tie-bidder.

3 3.5.2 3.5.2 Since the Bidder is expected to source fuel through imports from captive mines situatedoutside India, or from a long term fuel supply contract in respect thereof the Bid for the Projectshall be the Tariff comprising the Fixed Charge and the Fuel Charge which shall be specifiedseparately. As a condition of bidding, the indicative price of Fuel forming part of the FuelCharge to be offered by the Bidder shall not exceed an amount that reflects 90% of the price ofFuel computed with reference to the arithmetic mean of HBA Indonesia for a period of 180(one hundred and eighty) days six months immediately preceding the date month in which is30 days prior to the Bid Date occurs as specified in accordance with Clause 22.2.3 of the draftPSA forming part of the Bidding Documents.

HBA Indonesia is published by theGovernment of Indonesia on monthly basis.Hence this clause has been appropriatelymodified

Deviation 2: Seeking more information related to Bid parameters

Sl Clause/ Section Content Justification4 Letter comprising the

bidpoint number 33: Bidparameters

A Tariff comprising a Fixed Charge of Rs. …. and paise …. per kWh (Rupees.… and paise .…)and a Fuel Charge comprising (i) the cost of Fuel in US cents$$ .... (US cents….) per kWh, and (ii)the cost of transportation in US cents .... (US cents….) per kWh)A Tariff comprising of Rs (a+b+c) per KWH i.e., Rs .……….. .… (Rupees …. ) per kWhcomprising a (a) Fixed Charge of Rs. …… (Rupees .… ….) per kWh (b) a Fuel Charge of Rs.….…(Rupees …. ….) per kWh and (c) Transmission charges Rs .......... ( Rupees .......) perKWH plus Transmission losses Rs .......... ( Rupees .......) per KWH which represents thefollowing:

Sl.No Parameter UnitsQuotedValue1 Computation

Reference inPSA as the

1. As per Clause 22.2.1 of the PSA, theBidder after execution of PSA mustrepresent and warrant that Quoted Tariffunder the Bid submitted, conforms to theprovisions of the PSA and the Utility hasthe right to deduct tariff for paymentincase of any misrepresentation

2. Provisions of PSA require variousparameters such as landed fuel cost,average GCV, components of fuel chargeetc, for computing the Fuel Charge forpayment purposes

1 Bids shall be quoted up to four decimal points

case may be1 Tariff Rs/kWh Qt=FX+FL+T2 Fixed Charge Rs/kWh FX 21.2.13 Fuel Charge Rs/kWh FL 22.2.1

4Actual TransmissionCharge and Losses2 Rs/kWh T

5.55.6

Parameters forming the Quoted Fixed Charge (FX = FXb + FXt)

5Fixed Charge (Exclusiveof Taxes and Duties) Rs/kWh FXb 22.2.1

6 Taxes and Duties3 Rs/kWh FXt 22.2.1Parameters forming the Quoted Fuel Charge4 ( FL = (A+B) * Ex + C + D + E)

7

Cost of Imported Fuel(Exclusive of Taxes andDuties) Cents/kWh A 22.2.1

8

Cost of transportation ofShipment for ImportedFuel (Exclusive of Taxesand Duties) Cents/kWh B 22.2.1

9

Cost of inlandtransportation of ImportedFuel (Exclusive of Taxesand Duties) Rs/kWh C 22.2.1

10

Cost of Port handling(Exclusive of Taxes andDuties) Rs/kWh D

11 Taxes and Duties5 Rs/kWh E 21.9.1

12 Exchange Rate Rs/Cents ExTo be taken asper RFP

Parameters forming the Transmission Charges and Losses (T = TCe + TLe)

13 Transmission Charges Rs/kWh

TCe =TC/(0.73 x85% x 106) 5.5

3. In order to ascertain the conformance ofthe Quoted Tariff to PSA provisions, thebuilding blocks of Quoted Tariff havebeen sought from the Bidders

4. The proposed modification has no bearingon evaluation whatsoever

2 Bidder shall provide supporting documents and computation of Transmission charges (Rs/kWh)3 Bidder shall provide item wise break up of cost and corresponding proof. Utility reserves the right to modify the quote as deemed fit in absence of such proof4 Bidder shall provide documentary evidence of cost of inland transportation and Port handling5 Bidder shall provide item wise break up of cost and corresponding proof. Utility reserves the right to modify the quote as deemed fit in absence of such proof

14 Transmission Losses Rs/kWh

TLe =(FX+FL+TCe)x TL/(1-TL)

Other Parameters considered

15Transmission losses as onBid Due Date kWh TL 5.6

16Transmission charges as onBid Due Date Rs/MW/Month TC 5.5

17 Point of Grid Connectiondetailsa.Name of the Sub stationb. Name of STU/ CTUc.Name of the Region/State -

16 The Phase from which thepower is supply to theUtilitya.Unit No.b.Phase No. -

5 Disclaimer The Utility may in its absolute discretion, but without being under any obligation to doso, update, amend or supplement the information, assessment or assumptions contained inthis RFP. It may also be noted that some of the provisions of this RFP have beensuitably modified and are yet to be approved by the competent authority and theUtility shall notify changes, if any, as per the timelines specified in the RFP.

The deviations in PSA document need to beapproved by APERC. In case there are somechanges suggested by commission, thedocuments may have to be changedaccordingly. This is clarified to Bidders in theDisclaimer section

Annexure II- Deviation in PSA Document

Deviation 1: Bringing more clarity in the PSA documentSL Section/

ClauseValue/ Text Justification

1 3.1.1 Subject to and in accordance with the provisions of this Agreement, Applicable Laws and the ApplicablePermits, the Utility hereby awards to the Supplier the supply contract set forth herein including the rightand authority to utilise the Concessional Fuel for producing electricity at the Power Station forsupply thereof to the Utility (the “Supply Contract”) for a period of [ ( )] 12 years commencing from theAppointed Date Supply Date, and the Supplier hereby accepts the Supply Contract and agrees toimplement the same subject to and in accordance with the terms and conditions set forth herein

Appointed Date may vary depending onthe time taken by both Utility andSupplier to fulfill condition precedents.The state is expecting to purchase powerfrom April 1st 2016 which is a fixed date.So the clause is changed to specifysupply period of 12 years from thesupply date.

2 4.1.3 (f) acquired the real estate for the Power Station and submit documentary evidence in respect of thesame to the Utility;

For the proof, the bidder must submit thedocumentary evidence.

3 5.5 The Supplier shall be liable for payment of all charges, due and payable under Applicable Laws, forinter-state and intra-state transmission of electricity from the Point of Grid Connection to the DeliveryPoint. For the avoidance of doubt, the Parties expressly agree that inter-state and intra-statetransmission of electricity shall be undertaken solely at the risk and cost of the Supplier and allliabilities arising out of any failure of inter-state and intra-state transmission shall, subject to theprovisions of Clause 21.4.3, be borne by the Supplier. The payment of Transmission Charges fromPoint of Grid to Point of Delivery shall be paid by Supplier and would be reimbursed by theUtility. The Parties further agree that the obligation of the Supplier to pay the regulated charges fortransmission of electricity shall be restricted to the tariffs and rates applicable on the Bid Date for andin respect of 100% (hundred per cent) of Contracted Capacity and any differential arising fromrevision of the regulated tariffs and rates thereafter shall be payable or recoverable, as the case may be,by the Utility. The Parties also agree that the regulated charges applicable for transmission ofelectricity referred to hereinabove as on the Bid Date shall be deemed to be Rs. ... (Rupees ...) forand in respect of 100% (hundred per cent) of the Contracted Capacity£, which charges shall at alltimes be due and payable by the Supplier.

1. As per the current provisions of theMPSA, tariff is implicit of transmissioncharges and losses on the Bid Date andUtility shall reimburse any variationsfrom the values prevailing on the BidDate.

2. Since as per the model PSA, FixedCharge is subject to a reduction of 2%per annum, element of transmissioncharges and losses which are normallyimplicit in the Fixed Charge are alsosubject to this reduction leading to anunder-recovery for the bidders. This maylead to the Bidders loading the unde-recovery upfront.

3. Hence, transmission charges have beende-linked from fixed charge and actualtransmission charges and losses incurredwill be borne by the utility and

4 5.6.1 The Utility shall be liable for the transmission losses in all inter-state and intra- state transmission ofelectricity from the Point of Grid Connection to the Delivery Point. For the avoidance of doubt, the

Parties expressly agree that transmission of electricity shall be undertaken solely at the risk and costof the Supplier and all liabilities arising out of any transmission losses on inter-state and intra-statetransmission lines shall be borne by the Utility. The Parties further agree that the obligation of theSupplier to bear the transmission losses shall be restricted to the level of losses determined by theCentral Commission as on the Bid Date for this Project and any differential (higher or lower)arising from revision in the level of losses thereafter by the Central Commission shall be borne by theUtility.

transmission charges shall be reimbursedto the supplier upon submission of bills

4. However, since in order to evaluatebidders on total landed cost basis,transmission charges are included forevaluation purposes

5. The proposed deviation is inline with theearlier case-1 approach as well as theongoing practice with other PPAs andhence is administratively simpler to bothparties.

5 5.6.2 The Supplier represents and warrants that it has ascertained and assessed the applicabletransmission losses from the Point of Grid Connection to the Delivery Point as determined by theAppropriate Commission for and in respect of the Bid Date, and expressed in the form of theirproportion to the electricity supplied hereunder at the Point of Grid Connection. The Supplieracknowledges, agrees and undertakes that the product of such transmission losses (expressed inkWh) and the Tariff shall be due and payable by the Supplier to the Utility and shall be adjusted inthe relevant Monthly Invoice. For the avoidance of doubt and by way of illustration, the Partiesagree that if the transmission losses in any month are equivalent to 1(one) lakh units and theTariff payable for that month is Rs. 3 (Rupees three) per kWh, an amount of Rs. 3,00,000 (Rupeesthree lakh) shall be due and payable by the Supplier to the Utility and shall be adjusted in theMonthly Invoice for that month.

6 5.7 The Supplier shall be liable for payment of all the charges, due and payable under Applicable Laws bythe Supplier to the SLDC and RLDC for and in respect of all its supplies to the Utility. The sameamount shall be reimbursed by the Utility upon submission of relevant bills.

7 14.1.1 The Power Station or any Unit thereof, as the case may be, shall be deemed to be complete when theCompletion Certificate or the Provisional Certificate, as the case may be, is issued under theprovisions of Article 13. The commercial operation date of the Power Station or any Unit, as the casemay be, shall be the date on which the Power Station or such Unit is deemed fit for generatingelectricity and supplying it to the Grid upon issuance of such Completion Certificate or theProvisional Certificate (the “COD”). It is hereby clarified that in case the power station has alreadycompleted competition work and is under operation. COD shall be construed as the Supply Dateand the Supplier shall have the obligation to commence supply of power by supply date.

Many of the plants have alreadycommissioned. For those plants, theCOD has been defined to be the Supplydate for this agreement.

8 18.2 Contracted Capacity 1. The Utility has defined the ContractedCapacity to bring in more clarity as

Pursuant to the provisions of this Agreement, the Supplier shall dedicate a net generating capacity(Generation capacity reduced by Auxiliary consumption and transmission losses up to Point ofGrid Connection) *** MW to the Utility as the capacity contracted hereunder (the “ContractedCapacity”) and the Contracted Capacity shall at all times be operated and utilised in accordance with theprovisions of this Agreement.

capacity available at the Point of GridConnection

2. This is administratively easier sincewhatever is the Contracted Capacity,shall be available for scheduling by theDISCOMS without any deductions oradjustments at their end. This will simplySLDC operations as well.

9 19.1.2 The Parties expressly agree that in the event two or more Utilities have entered into long-term powersupply agreements with the Supplier, which agreements are similar to this Agreement, they may in theirdiscretion appoint a common firm to discharge the functions of the utility’s Engineer under theirrespective agreements. In the event no common firm is appointed by such Utilities, the Utility whichcontracts the largest volume of capacity in the Power Station shall appoint the utility’s Engineer todischarge the functions specified hereunder. Copies of all communications received by the Supplier fromthe utility’s Engineer and the replies thereto shall be sent forthwith by the Supplier to all Utilities whohave not engaged the utility’s Engineer.

APDISCOMS believe that a common utilityengineer is difficult to engage and deploy,hence this provision has been modified

10 22.2.1 The Utility shall pay to the Supplier for and in respect of the Fuel utilised for generation of a kWh ofelectricity for supply thereof to the Utility, a fuel charge determined from time to time in accordancewith the provisions of this Clause 22.2.1 Article and expressed in Rupees per kWh (the “Fuel Charge”)

For the avoidance of doubt, the Supplier represents and warrants that the Fuel Charge referred tohereinabove conforms with the provisions of Clause 22.2.3 and comprises

Sl.No Parameter Units ValueFuel Charge

A Fuel Charge (Exclusive of Taxes and Duties) Rs/kWh

B Cost of Imported Fuel (Exclusive of Taxes andDuties)

Cents/kWh

C Cost of transportation of Shipment for Imported Fuel(Exclusive of Taxes and Duties)

Cents/kWh

This Article contains relevant clauses tocompute Fuel Charge. 22.2.1 clause only re-iterates the bid parameters and does notspecify Fuel charge computation procedureThis is a semantic change

A table of components of Fuel Chargeand an illustration have been added forbetter clarity to Suppliers

D Cost of inland transportation of Imported Fuel(Exclusive of Taxes and Duties) Rs/kWh

E Cost of Port handling (Exclusive of Taxes andDuties) Rs/kWh

F Exchange Rate Rs/Cents

and any error or misrepresentation herein, as and when detected, shall entitle the Utility toreduce the Fuel Charge correspondingly and recover any excess payments made in the pastalong with interest at the rate specified in Clause 38.4.

For the avoidance of doubt and by way of illustration:

SL Item Unit ValueA Landed Fuel Cost as per 22.2.2 of PSA Rs/Kg 4.45B SHR as per 22.1.1 of PSA KCal/kWh 2000C GCV as per 22.3 of PSA KCal/Kg 5000D = A x B / C Fuel Charge Rs.kWh 1.78

11 22.2.2 Pursuant to the provisions of Clause 22.2.1, the Parties expressly acknowledge and agree that the figurearrived at by dividing the product of Specified SHR and the Landed Fuel Cost per kilogram of Fuel bythe Average GCV per kilogram of coal shall be deemed to be the Fuel Charge hereunder. The Partiesfurther agree that the Fuel Charge for electricity generated from Imported Fuel and the Fuel, if any,from AFSA shall be determined separately, and unless specified to the contrary, Fuel Charge shall bedeemed to be based on Imported Fuel.

Landed cost of Fuel shall be the weighted average price of Fuel, in Rs. per kilogram, which isdue and payable by the Supplier for procuring Fuel in accordance with the provisions of Clause22.2.3, and shall include the cost of transportation thereof as specified in Clauses 22.2.4 and22.2.5 and the cost of washing, if any, as specified in Clause 22.2.6 [and the cost of crushing asspecified in Clause 22.2.7 and the cost of other charges, if any, as specified in Clause 22.2.8] (the“Landed Fuel Cost”). Provided, however, that the Landed Fuel Cost shall in no case exceed theactual cost incurred by the Supplier. For the avoidance of doubt, the Parties expressly agree that in the

1. Specified SHR is used for better clarity2. Component of Landed Fuel Cost have

been ensured that the it is lower of actualcost and relevant upper limit.

3. The components are GCV adjusted sothat the that the Fuel Charge payable bythe Utility shall be the same as if theGCV is in accordance with the valuespecified in 22.2.3

4. So removing these redundant clause whichare confusing and ambiguous

5. An illustration has been added for the benefitof Supplier

event of any deviation from the GCV specified in [Clause 22.2.3/ the FSA or AFSA, as the case maybe,] the Landed Fuel Cost shall be deemed to be adjusted and modified such that the Fuel Chargepayable by the Utility shall be the same as if the GCV is in accordance with the value specified in[Clause 22.2.3/ the FSA or AFSA, as the case may be].

For the avoidance of doubt and by way of illustration:SL Item Unit ValueA Price of Fuel Rs/Kg 2.94B Cost of Transportation Rs/Kg 1.51C = A + B Landed Fuel Cost Rs/Kg 4.45

12 22.2.5 Provided that the Supplier shall normally undertake shipment of Fuel, comprising no less than 90%(ninety per cent) of its annual import, under long term contracts which have a duration of one year ormore, and the cost of transportation hereunder shall be computed and paid at the rate specified in suchcontracts.

Provided further that the freight charges payable under such long term contracts shall not exceed thelower of, (i) the freight charge determined as on the Bid Date and adjusted to reflect the variation inFreight Index from time to time, and (ii) the average freight payable under similar contracts entered intoduring a period of 180 (one hundred and eighty) days preceding the date of that contract, and whereinformation relating to such contracts is not available, then 90% (ninety per cent) of the amountcomputed under sub-clause (i) hereinabove.

For the avoidance of doubt and by way of illustration:

SL Item Unit Value

A Cost of transportation of Shipment for ImportedFuel (as per Bid) Cents/kWh 0.9

B SHR as per 22.1.1 of PSA KCal/kWh 2000

1. Current provisions of the model PSA aredifficult to implement as it is unlikelythat similar freight contracts areavailable for benchmarks

2. Hence provisions of this clause havebeen modified

3. An illustration has been added for thebenefit of Suppliers

C GCV as per 22.3 of PSA KCal/Kg 5000D = A x C/B Indicative cost of transportatin of Shipment Cents/Kg 2.25E 20% of price of Fuel as per 22.2.3 Cents/Kg 1

F = min(D,E) Cost of transportation of Shipment for ImportedFuel Cents/Kg 1

G Variation in Freight Index % 10%

H = F x (1+G) Cost of transportation of Shipment for ImportedFuel Cents/Kg 1.1

I Exchange rate Rs/Cents 0.6

J = H x I Cost of transportation of Shipment for ImportedFuel Rs/Kg 0.66

K Rail Freigtht Rs/Kg 0.5L = 110% x K 110% of Rail Freight Rs/Kg 0.55M Actual cost of Road/ Rail transportation Rs/Kg 0.8N = min(L,M) Cost of inland transportation of Imported Fuel Rs/Kg 0.55

O Actual Port Handling Cost Rs/Kg 0.3P = J+N+O Total Cost of Transportation Rs/Kg 1.51

13 22.4.1 Upon execution of the FSA between the Supplier and the supplier of Fuel, the same shall be assigned bythe Supplier in favour of the Utility prior to the Appointed Date. For the avoidance of doubt, the Partiesagree that the rights of the Utility arising from such assignment shall be limited to procuring that theConcessional Fuel is used only in accordance with the provisions of this Agreement and for no otherpurpose.

It is hereby clarified that the Supplier shall dedicate a Contracted Quantity sufficient to generateContracted Capacity at Normative Availability at all times during the tenure of this Agreement.

The part of the clause related to concessionalfuel has been removed considering the natureof tender (100 imported coal based tender).

1. Under the current DBFOO approach,deemed availability benefits have beenincorporated to protect the supplier in theevent of fuel shortage

2. Existing case-1 route doesn’t havesimilar provisions and there is a

Such Contracted Quantity (“Dedicated Fuel”) shall, at all times be for the exclusive benefit of theUtility and the Supplier shall in no event divert the “Dedicated Fuel”. Failing which the Suppliershall be deemed to be in material breach of this Agreement.

possibility that a single plant hasmultiple PPAs with and without deemedavailability provisions.

3. There is a risk that the Supplier maydivert the Fuel under the current DBFOOPSA to another PPA and unduly claimdeemed availability benefit under thisPPA

4. Provisions of “Dedicated Fuel” havebeen included to prevent adverse impactto the Utility

5. Bidders, during the pre-bid conferencehave largely agreed that since the fuelsource is a captive mine, the proposedprovisions are reasonable

14 34.134.2 34.1 If as a result of Change in Law, the Supplier suffers an increase in costs or reduction in net after-

tax return or other financial burden for and in respect of Contracted Capacity, the aggregate financialeffect of which exceeds the higher of Rs. 3 crore (Rupees three crore) and or 0.1% (zero point one percent) of the Capacity Charge in any Accounting Year, the Supplier may so notify the Utility andpropose amendments to this Agreement so as to place the Supplier in the same financial position as itwould have enjoyed had there been no such Change in Law resulting in increased costs, reduction inreturn or other financial burden as aforesaid. …

34.2 If as a result of Change in Law, the Supplier benefits from a reduction in costs or increase in netafter-tax return or other financial gains for and in respect of Contracted Capacity, the aggregatefinancial effect of which exceeds the higher of Rs. 3 crore (Rupees three crore) and or 0.1% (zeropoint one per cent) of the Capacity Charge in any Accounting Year, the Utility may so notify theSupplier and propose amendments to this Agreement so as to place the Supplier in the samefinancial position as it would have enjoyed had there been no such Change in Law resulting indecreased costs, increase in return or other financial gains as aforesaid…

This is s semantic error in the MPSAdocument. Instead of AND the conditionsshould compared using OR.

15 39.1 Definition “Contract Period” means the period starting on and from the Appointed Date Supply Date and endingon the earlier of the 12th (twelfth) anniversary of the Appointed Date Supply Date and the date oftermination of the Agreement;

Appointed Date may vary depending onthe time taken by both Utility andSupplier to fulfill condition precedents.The state is expecting to purchase powerfrom April 1st 2016 which is a fixed date.

So the clause is changedinconsequentially to specify supplyperiod of 12 years from the supply date.

16 39.1 Definition “Contracted Capacity” shall have the meaning as set forth in Clause 18.2. The contracted capacity isthe net capacity always available for supply to the Utility (generation capacity reduced byauxiliary consumption and transmission loss up to point of Grid Connection)

The Utility has defined the ContractedCapacity to bring in more clarity ascapacity available at the Point of GridConnection

17 39.1 Definition “Open Capacity” shall have the meaning as set forth in clause 18.4.1; Open capacity provision has beenremoved from the PSA

18 39.1 Definition “Power Station” means the generating station as described in Schedules A and B or a Unit thereof, andshall include the Dedicated Transmission System, Project Assets, Project Facilities, [Coal Mine/Blocks,Captive Mines and the allocation of Concessional Fuel which is linked to or attached with the Project][and any port or berth thereof with all the equipment installed for import of Fuel for the Project];

This is an imported coal based tender. Socoal mine or block is not relevant.

19 39.1 Definition “Specified SHR” shall have the meaning as set forth in Clause 22.11; Specified SHR has been defined to bringin more clarity in fuel chargecomputation.

20 39.1 Definition “Supply Date” shall have the meaning of date from which the project shall supply power to theUtility under this PSA. In general, this shall be deemed to be Scheduled Completion Date;

The Supply period is defined as 12 yearsfrom supply period. So the supply periodis defined here. In the PSA, there is nodiscussion on when the supply shouldstart. SCOD may be considered as supplydate but this date is not so relevant forplants which are already commissioned.This term has been added in thedefinition bring in more clarity.

21 39.1 Definition “Dedicated Fuel” shall have the meaning as set forth in Clause 22.4.1; As explained earlier, the DISCOMS areseeking dedicated fuel under this PSA andhence relevant definition has been includedfor easy reference.

Deviation 2: Removing provision of extension of contract post predefined supply period of 12 yearsSL Section/ Clause Value/ Text Justification22 3.1.1 Provided that the Utility shall, at any time no earlier than 3 (three) years, but no later than 2

(two) years prior to completion of the aforesaid Contract Period of [ ( )] years, upon issuinga notice to this effect to the Supplier, be entitled to an extension of 5 (five) years in theContract Period under and in accordance with the provisions of Clause 31.4.

Provided that the Supplier shall, at any time no earlier than 3 (three) years, but no later than 2(two) years prior to completion of the aforesaid Contract Period of [ ( )] years, upon issuinga notice to this effect to the Utility, be entitled to an extension of 5 (five) years in the ContractPeriod under and in accordance with the provisions of Clause 31.4.

1. As per the power projects made by theutility, there may be no powerrequirement from this tender after 12years

2. Hence provisions related to extension ofcontract have been removed.

3. Upon expiry of 12 years, the contract willclose for both parties without anycompensation for either party whatsoever.

23 3.2 Extension of Contract Period Same explanation as above24 31.4 Extension of Contract Period Same explanation as above

Deviation 3: Expediting events and milestones defined in the PSA so that the power can be supplied on Scheduled COD i.e.April 1st 2016

SL Section/ Clause Value/ Text Justification25 4.1.3 The Conditions Precedent required to be satisfied by the Supplier within a period of 180 (one

hundred and eighty) 120 (one hundred and twenty) days from the date of this Agreementshall be deemed to have been fulfilled when the Supplier shall have:

Most of the condition precedents have beenalready fulfilled by the Bidders as verifiedduring the RFQ stage. In view of condensedtimelines, as the supply date is very close toPSA execution, deadline for fulfillment ofcondition precedent fulfilment has beenreduced.

26 4.5 Deemed Termination upon delay

Without prejudice to the provisions of Clauses 4.2 and 4.3, and subject to the provisions ofClause 9.2, the Parties expressly agree that in the event the Appointed Date does not occur,for any reason whatsoever, within 180 (one eighty) days from before the 1st (first)anniversary of the date of this Agreement or the extended period provided in accordancewith this Agreement, all rights, privileges, claims and entitlements of the Supplier under orarising out of this Agreement shall be deemed to have been waived by, and to have ceasedwith the concurrence of the Supplier, and the Power Supply Agreement shall be deemed tohave been terminated by mutual agreement of the Parties.

In view of condensed timelines forcommencement of supply and also the factthat most of the participating power plants arein advanced stages of commissioning/alreadycommissioned, grace period for satisfyingconditions precedent has been reduced.

27 26.3 Within 7 (seven) days from signing of this Agreement No later than 45 (forty five) daysprior to commencement of the Construction Period or the Operation Period, as the case maybe, the Supplier shall by notice furnish to the Utility, in reasonable detail, information inrespect of the insurances that it proposes to effect and maintain in accordance with thisArticle 26.

As all plants are in advanced stage ofcompletion, seven days from PSA executionshould be sufficient for the bidder to submitall documents relevant to insurance

Deviation 4: Open access is sole responsibility of supplierSL Section/ Clause Value/ Text Justification28 4.1.3 (k) procured open access for the Contracted Capacity and for the term of this Agreement

and delivered a copy of the Transmission Service agreement/Open Access Agreementas applicable to the Utility.

In the interest of ensuring readiness to supplypower by the required date, open access forthe contracted capacity and PSA period hasbeen included as conditions precedent.

29 5.1.5 The Supplier shall, at its own cost and expense, in addition to and not in derogationof its obligations elsewhere set out in this Agreement:

(a) make, or cause to be made, necessary applications to the relevant GovernmentInstrumentalities with such particulars as may be required for obtaining Applicable Permits,other than those set forth in Clause 4.1.2, and obtain and keep in force and effect suchApplicable Permits in conformity with Applicable Laws. Non-grant of long term open accessshall be mutually decided by the Utility and Supplier Procure open access for theContracted Capacity from the Point of Grid Connection to Delivery Point and for theterm of this Agreement and submit documentary evidence of open access/transmissionservice agreement executed with STU/CTU as the case may be to the Utility withinseven (7) days of receipt of the same from the competent authority. In case open accessis not received on time, it shall entail the consequences of breach of agreement;

Same explanation as above.

Deviation 5: Reducing normative availability of the plant from 90% to 85% considering the uncertainty in the imported coalSL Section/ Clause Value/ Text Justification30 5.1.4 The Supplier shall install, operate and maintain the Power Station in accordance with the

Specifications and Standards and the Maintenance Requirements such that the Availability ofthe Contracted Capacity of the Power Station is at least 90% (ninety per cent) 85% (eightyfive per cent) thereof during each year of the Operation Period (the “NormativeAvailability”).

Normative availability has been reduced to85% to align to CERC norms as well reducefixed charge burden to the DISCOMS

31 21.4.4 The obligations of the Utility to pay Fixed Charges in any Accounting Year shall in no caseexceed an amount equal to the Fixed Charge due and payable for and in respect of theNormative Availability of 90% (ninety per cent) 85% (eighty five) computed with referenceto the entitlement of the Utility in Contracted Capacity (the “Capacity Charge”). Provided,however, that in the event of Despatch of the Power Station beyond such [72% (seventy twoper cent) 85% (eighty five per cent)], Incentive shall be payable in accordance with theprovisions of Clause 21.6.1. For the avoidance of doubt, the Capacity Charge referred toherein shall be equal to and computed with reference to the maximum Availability of [72%(seventy two per cent)] 85% (eighty five per cent) of the Contracted Capacity.

As per original clause, the maximum FixedCharge payable was for despatch of 72%(Normative availability of 90% of Utility’sentitlement of 80% of contracted capacity).Since Open Capacity provisions has beenremoved in the PSA and the normativeavailability has been reduced to 85%, thisfigure – 72% has been changed to 85%.

32 21.4.5 Pursuant to the provisions of Clause 21.4.4, the Supplier shall not, for and in respect of anyday, be entitled to receive payment of Fixed Charge for Availability exceeding 85% (ninetyper cent)[72% (seventy two per cent)] thereof and in the event it supplies electricity to theUtility in excess of such 90% (ninety per cent)[72% (seventy two per cent)], such excesssupply shall be eligible only for payment of Fuel Charge, save and except the payment ofIncentive due under the provisions of Clause 21.4.4.


33 21.6.2 In the event that Availability in any month is less than the Normative Availability, the FixedCharge for such month shall be reduced to the extent of shortfall in Normative Availabilityand in addition, any reduction below the Availability of 85% (eighty five per cent) 80%(eighty per cent) shall, subject to the provisions of Clause 21.7, be multiplied by a factor of0.25 (zero point two five) to determine the Damages payable for such reduction inAvailability. For the avoidance of doubt, the Parties agree that the Damages to be deductedfor any reduction below the aforesaid Availability of 85% (eighty five per cent) 80% (eightyper cent) shall be 25% (twenty five per cent) of the Fixed Charge which is reduced on accountof shortfall in Availability below such 85% (eighty five per cent) 80% (eighty per cent).

Since normative availability has been reducedfrom 90% to 85%, the availability belowwhich penalty shall be levied is also revisedfrom 85% to 80%.

Deviation 6: Removing provision of Open CapacitySL Section/ Clause Value/ Text Justification34 18.4 Open Capacity Utility has done away with provisions related

to open capacity owing to complexity inimplementation and the general negativefeedback from supplier community regardingits demerits. .

35 18.5.1 If such Contracted Capacity is not utilised for any Distribution Licensee hereunder, theSupplier may use sell the whole or part thereof as Open Capacity to other DistributionLicensees or Buyers, provided that the use of Concessional Fuel, if any, for production ofelectricity from such Open Capacity shall be governed by the provisions of Clause 22.6.

Open Capacity is no longer relevant to thisPSA. So the clause has been modifiedappropriately. Again Clause 22.6 is forrevenue sharing for concessional based plant.As this tender is for imported coal, this clausehas been modified.

36 22.4.3 The Fuel procured under the FSA shall be utilised by the Supplier for production ofelectricity to be supplied to the Utility as part of the Contracted Capacity. and only thesurplus, if any, may be used for Open Capacity, subject to the provisions of Clause 22.6.

Open Capacity provision has been removedfrom the PSA and hence this clause has beensuitably modified.

37 24.1.3 Scheduling and supply of electricity from Open Capacity may be undertaken by the Supplierin such manner as it may determine in conformity with the Grid Code.

Open Capacity provision has been removedfrom the PSA and hence this clause has beensuitably modified.

Deviation 7: Removing clauses irrelevant to this particular tenderSL Section/ Clause Value/ Text Justification38 3.1.1 Subject to and in accordance with the provisions of this Agreement, Applicable Laws and the

Applicable Permits, the Utility hereby awards to the Supplier the supply contract set forthherein including the right and authority to utilise the Concessional Fuel for producingelectricity at the Power Station for supply thereof to the Utility (the “Supply Contract”)for a period of 12 years commencing from the Supply Date, and the Supplier hereby acceptsthe Supply Contract and agrees to implement the same subject to and in accordance with theterms and conditions set forth herein.

The stated Clause is related to Concessionalfuel. As this tender is for imported coal, thisclause has to be modified.

39 5.1.5 (k) assign, transfer or relinquish the Fuel Supply Agreement for and in respect of Concessional The stated Clause is related to Concessionalfuel. As this tender is for imported coal, this

Fuel, if any, to the Utility, to the extent allocated or assigned for Contracted Capacity, uponTermination of this Agreement, in accordance with the provisions thereof;

clause has to be modified.

40 5.2.3 The Supplier shall procure that each of the Fuel Supply Agreements, to the extent it providesfor supply of Concessional Fuel for the Contracted Capacity, contains provisions that entitlethe Utility to step into such agreement, in its sole discretion, in substitution of the Supplier inthe event of Termination or Suspension (the “Covenant”). For the avoidance of doubt, it isexpressly agreed that in the event the Utility does not exercise such rights of substitutionwithin a period not exceeding 180 (one hundred and eighty) days from the Transfer Date, theFuel Supply Agreements to the extent specified hereinabove, shall be deemed to cease to bein force and effect on the Transfer Date without any liability whatsoever on the Utility and theCovenant shall expressly provide for such eventuality. The Supplier expressly agrees toinclude the Covenant in all its Fuel Supply Agreements and undertakes that it shall, in respectof each of the Fuel Supply Agreements, procure and deliver to the Utility an acknowledgmentand undertaking, in a form acceptable to the Utility, from the counter party(ies) of each of theFuel Supply Agreements, whereunder such counter party(ies) shall acknowledge and acceptthe Covenant and undertake to be bound by the same and not to seek any relief or remedywhatsoever from the Utility in the event of Termination or Suspension.


41 7.1 (n) all its rights and interests in the Fuel Supply Agreement for supply of Concessional Fuel, tothe extent such Fuel is required for the Contracted Capacity, shall pass to and vest in theUtility on the Transfer Date free and clear of all liens, claims and Encumbrances, without anyfurther act or deed on its part or that of the Utility, and that none of the Project Assets shall beacquired by it, subject to any agreement under which a security interest or other lien orEncumbrance is retained by any person on the aforesaid Concessional Fuel, save and exceptas expressly provided in this Agreement;


42 9.1.3 Notwithstanding anything to the contrary contained in this Agreement, in the eventPerformance Security is not provided by the Supplier within a period of 90 (ninety) daysfrom the date of this Agreement, the Utility may encash the Bid Security and appropriate theproceeds thereof as Damages, and thereupon all rights, privileges, claims and entitlements ofthe Supplier under or arising out of this Agreement and the Fuel Supply Agreement shall bedeemed to have been waived by, and to have ceased with the concurrence of the Supplier, andthis Agreement and the Fuel Supply Agreement, to the extent of Concessional Fuel requiredfor the Contracted Capacity, shall be deemed to have been terminated with the consent of the


Supplier.43 18.7 Any generating capacity in excess of the Committed Capacity and forming part of the

Installed Capacity shall be deemed to be merchant capacity (the “Merchant Capacity”) whichmay be utilised by the Supplier in such manner as it deems fit, and the provisions of thisAgreement., save and except the provisions relating to Concessional Fuel, shall not apply tosuch excess capacity. For the avoidance of doubt, use of Concessional Fuel for Merchantcapacity shall be governed by the provisions of Clause 22.6.

Clause is related to Concessional fuel. Asthis tender is for imported coal, this clausehas to be modified.

44 22.2.4 The total cost of transportation of domestic fuel … Clause is related to Concessional fuel. As thistender is for imported coal, this clause has tobe modified.

45 22.2.6 In the event of washing coal … Clause is related to Concessional fuel. As thistender is for imported coal, this clause has tobe modified.

46 22.3.1 The weighted average of the GCV of Fuel received during any month at the Power Stationshall be reckoned as the average GCV (the “Average GCV”) for the purposes of this Article22 and shall, subject to the provisions of Clause 22.2.2, apply for computing the applicableelement of the Landed Fuel Cost and the Fuel Charge payable for the use of such Fuel. Forthe avoidance of doubt, the Average GCV hereunder shall be computed separately forConcessional Fuel procured through FSA, any Fuel procured under AFSA and any otherFuel, as the case may be, for the purposes of determining the Fuel Charge.

Clause is related to Concessional fuel. As thistender is for imported coal, this clause has tobe modified.

47 22.6 Use of Concessional Fuel for Buyer Clause is related to Concessional fuel. As thistender is for imported coal, this clause has tobe modified.

48 22.7 The Supplier shall at all times maintain a minimum stock of Dedicated Concessional Fueland Fuel from AFSA, if any, which is sufficient for full production of electricity fromContracted Capacity for supply thereof to the Utility for a continuous period of 7 (seven)days (the “Minimum Fuel Stock”).


49 22.11.2 The Supplier shall, no later than 1100 hours on each day, provide a statement to the Utilitysetting out the quantities and the average GCV of the Concessional Fuel procured underFSA, any Fuel procured under AFSA and any other Fuel, as the case may be, which wereutilised for generation of electricity during the preceding day. Based on such average GCV,the consumption of respective Fuels and the electricity generated during the preceding day,

This is an imported coal based tender. Soconcessional fuel related clauses are notrelevant.

the Supplier shall compute and specify the actual SHR for such preceding day.50 23.3.1 For the avoidance of doubt, the Parties expressly agree that the Supplier shall be entitled to

appropriate the revenues from sale hereunder for recovering the Tariff due and payable to itfor sale of such Contracted Capacity to the Utility and the surplus remaining, if any, shall beappropriated for recovery of its dues from the Utility. The Parties further agree that theSupplier shall be entitled to use Concessional Fuel for production of electricity and salehereunder.


51 28.9 Termination of Fuel supplyIn the event of Termination for Force Majeure Event, the Supplier shall cease to be entitledto the supply or production of Concessional Fuel to the extent allocated or utilised for theContracted Capacity, and the provisions of FSA to the extent thereof shall be held inabeyance until the use of such Concessional Fuel for any other purpose, utility or buyer isauthorized by the Central Government.


52 30.1.1 Upon occurrence of a Supplier Default, the Utility shall be entitled, subject to ApplicableLaws and without prejudice to its other rights and remedies under this Agreement includingits rights of Termination hereunder, to suspend all rights of the Supplier under the FuelSupply Agreement relating to the Supplier’s right to receive Concessional Fuel, produceelectricity therefrom and collect revenues from sale of such electricity (the “Suspension”),save and except as provided in Clause 31.3.3..


53 31.1.1 (g) the Supplier uses the Concessional Fuel in breach of this Agreement and fails to pay Damagesin accordance with the provisions of Clause 22.6.2;


54 31.3.3 Upon Termination or expiry of the Contract Period by efflux of time, the Fuel SupplyAgreement or any other arrangement for production and supply of Concessional Fuel shallcease to be effective and the Supplier shall have no right whatsoever to use such ConcessionalFuel for the Power Station without the express permission or authorisation by the CentralGovernment in this behalf. Provided, however, that the Parties may mutually agree to a furtherextension of the Contract Period on the terms specified in this Agreement.


55 31.5 Restriction on use of Concessional Fuel Clause is related to Concessional fuel. As thistender is for imported coal, this clause has tobe modified.

56 31.6.2 The Utility agrees and undertakes to exercise its rights hereunder only to the extent of theContracted Capacity and the use of Concessional Fuel therefor, and the Supplier may supplyelectricity to other Distribution Licensees and Buyers in accordance with the provisions of thisAgreement.


57 31.8 Substitution upon Termination Clause is related to Concessional fuel. As thistender is for imported coal, this clause has tobe modified.

58 32 Article 32: DIVESTMENT OF RIGHTS AND INTEREST Clause is related to Concessional fuel. As thistender is for imported coal, this clause has tobe modified.

59 33.2.2 The Supplier may mortgage, pledge, assign or hypothecate the Site and Project Assets to theSenior Lenders as security for their debt, save and except any allocation, linkage, entitlement,rights or title to the Concessional Fuel required for the Contracted Capacity.


60 39 “Concessional Fuel” shall mean Fuel which is produced or procured by the Supplier throughany form of concessional, preferential or captive allocation or sale of such Fuel or the sourcethereof by a Government Instrumentality or an entity owned or controlled by the CentralGovernment or the State Government, as the case may be, but does not include Fuel, or thesource thereof, which is procured through any form of bidding, auction including the CoalMine/Blocks or any other means of procurement where the price of Fuel to be paid by theSupplier is determined by market forces;


61 39 “Project Assets” means all physical and other assets relating to and forming part of the Projectincluding:

(a) rights over the Site in the form of licence, Line ROW or otherwise;(b) tangible assets such as civil works and equipment including foundations,embankments, pavements, electrical systems, communication systems, relief centres,administrative offices and Sub-stations;(c) rights over Concessional Fuel;


62 Annex I (Schedule I)Terms of Reference forUtility’s Engineer3.1. ii

The role and functions of the Utility’s Engineer shall include the following:review, inspection and monitoring of Construction Works as set forth in Paragraph 4;

All plants are in advanced stage ofcompletion. Utility is not expecting to monitorconstruction.

63 Schedule O Vesting Certificate Clause is related to Concessional fuel. As thistender is for imported coal, this clause has tobe modified.

Deviation 8: Waiving Fixed Charge payment by the Utility to supplierSL Section/ Clause Value/ Text Justification64 18.5.1 If any Contracted Capacity, deemed as Committed Capacity hereunder, is utilised for

production of electricity and sale thereof to any other Distribution Licensee specified inClause 18.3, the Fixed Charge due and payable by Utility for and in respect of suchContracted Capacity shall, subject to the provisions of Clause 18.5.2, be recovered by theSupplier from such Distribution Licensee as if the electricity has been supplied to the Utilitybe deemed to be waived off and no Fixed Charge shall be payable by the Utility.

If the supplier is able to sell the unutilizedcapacity in the market, the Utility shall notbear any fixed charge burden.

Deviation 9: Clarifying SHR related clausesSL Section/ Clause Value/ Text Justification65 13.2.2 Tests in respect of Station Heat Rate shall be deemed to be successful only if the Tests

establish that the Station Heat Rate is equal to or lower than the rate specified in theSpecifications and Standards. Provided, however, that in the event the Tests establish that theactual Station Heat Rate exceeds the specified Station Heat Rate by upto10% (ten per cent)thereof, the Tests shall be deemed to be successful as if the Power Station has achieved thespecified Station Heat Rate. It is hereby clarified that if the power station has alreadybeen commissioned before the execution of this Agreement, the Test in respect of SHRshall be deemed to be successful.

Some of the plant have beencommissioned and have been supplyingpower to many buyers. For such plants,the SHR testing is no more relevant.

66 21.2.1 The Parties agree that the fixed charge shall, in accordance with the offer of the Supplier forthe Base Year, be Rs. .... (Rupees ...)£ per kWh, and to which the amount, if any, determinedin accordance with the provisions of Clauses 21.2.2 or 21.2.3, as the case may be, shall beadded or deducted, as the case may be, on quarterly basis and the sum thereof (the “InitialFixed Charge”) shall be revised annually in accordance with the provisions of Clause 21.2.4to determine the base fixed charge for the relevant Accounting Year (the “Base FixedCharge”).

1. Fixed Charge computation is the modelPSA is fairly complex, difficult tointerpret and implement.

2. Under the current provisions, Initial Fixedcharge is adjusted for incentive andpenalty on quarterly basis based on SHRperformance

3. SHR measurement and computation isitself very complicated. SHR duringtesting is measured against the norm i.e.2350 and the specified SHR for paymentis again adjusted for derating under clause22.2.1, ramp-up under schedule C andactual SHR under Clause 22.12

4. These adjustments not only difficult toundertake at the developer’s end but alsovery difficult to be validated at theDISCOMS’s end at the time of payment

5. Hence it is proposed that fixed chargecomputation be simplified and SHR becompletely de-linked from fixed chargecomputation

6. The proposal was well received by thebidders as well during the pre-bid

67 21.2.2 In the event the Completion Certificate specifies a Station Heat Rate that is lower than theStation Heat Rate specified in Schedule-C, the Initial Fixed Charge shall be increased suchthat for every improvement of 1% (one per cent) as compared to the Station Heat Ratespecified in Schedule-C, the amount specified in Clause 21.2.1 shall be increased by 1.5%(one point five per cent) thereof. Provided, however, that in case the source of Fuel is situatedwithin 100 (one hundred) kilometres of the Power Station, such increase shall be restricted to1% (one per cent) and if the Fuel is procured from overseas or from the open domestic market,such increase shall be the lower of, (a) 2.5% (two point five per cent) for every improvementof 1% (one per cent); and (b) actual costs.

68 21.2.3 In the event the actual Station Heat Rate is higher than the Station Heat Rate specified in theCompletion Certificate the Initial Fixed Charge shall be decreased such that for every increaseof 1% (one per cent) as compared to the Station Heat Rate specified in Schedule-C, theamount specified in Clause 21.2.1 shall be decreased by 2% (two per cent) thereof. Provided,however, that in case the source of Fuel is situated within 100 (one hundred) kilometres of the

Power Station, such decrease shall be restricted to 1.5% (one point five per cent) and if theFuel is procured from overseas or from the open domestic market, such decrease shall be thelower of, (a) 3% (three per cent) for every reduction of 1% (one per cent) in SHR; and (b)actual costs.

conference7. The utility will also benefit from such

simplification, since risk of loading ofincentives and penalties on fixed charge isdone away with.

69 22.1.1 The heat energy input, in kCal, required for generation and supply of 1 (one) kWh ofelectricity at the Point of Grid Connection, after accounting for auxiliary consumption andtransmission losses, if any, as determined by lower of a) Tests and specified in theProvisional Certificate or Completion Certificate, as the case may be, and b) SHR specifiedin Specifications and Standards shall be the net station heat rate of the Power Station (the“Station Heat Rate” or “SHR”). Provided that the SHR shall be adjusted from time to time inaccordance with the provisions of Clause 24.4, to account for any reduction in Despatch.Provided further that the aforesaid SHR shall be deemed to be increased by 0.15% (zeropoint one five per cent) per annum on each successive anniversary of COD and the numberso arrived at shall be the applicable SHR for that year.

1. As the evaluation is made on theassumption of SHR of Specification andStandards, Fuel charge should becomputed based on lower of test resultand SHR specified in the specificationand standards. Otherwise the Bidder mayquote lower fuel charge whereas theutility may end up paying higher fuelcharge

2. Monitoring dispatch every month is acumbersome task for the Utility. Theclause has been modified so that the SHRvalue is not being changed in relation tolevel of despatch

70 22.12.2 Upon revision of SHR pursuant to the provisions of Clause 22.12.1, the Fixed Charge shallbe increased in accordance with the provisions of Clause 21.2.2 as if such SHR is specifiedin the Completion Certificate (“Specified SHR”).

As the SHR related incentive and penaltyhave been removed from fixed chargecomputation, this clause is no more relevant.

71 24.4 In the event the Utility Despatches less than 2% (two per cent) of its entitlement in theContracted Capacity at any time and requires ramping up of generation thereafter, it shallallow a period of 8 (eight) hours to the Supplier for reaching Availability equal to suchentitlement in the Contracted Capacity and shall make an additional payment on account ofincrease in SHR computed in accordance with the provisions of Schedule-C for and inrespect of different levels of generation during the course of ramping up.

As discussed above, SHR modification on thebasis of level of despatch has been removed.In line with this change, the clause has beenmodified.

72 Schedule CPoint 2.2 and Annex III The Station Heat Rate of the Power Station shall be deemed to be higher in the event of

reduction in generation below 85% (eighty five per cent) of the Committed Capacity.Such increase, as a proportion of the Station Heat Rate shall be deemed to be in accordancewith the standard increase specified in Annex-III of this Schedule.

As discussed above, SHR modification on thebasis of level of despatch has been removed.In line with this change, the clause has beenmodified.

Deviation 10: Removing provision of deemed availability of non-availability due to shortage in fuel stockSL Section/ Clause Value/ Text Justification73 21.4.2 Upon occurrence of a shortfall in the Minimum Fuel Stock, Availability shall be deemed to be

reduced in accordance with the provisions of Clause 21.5.2. and the Non-Availability arisingas a consequence thereof shall, for the purposes of payment of Fixed Charge, be deemed to beAvailability to the extent of 70% (seventy per cent) of the Non-Availability hereunder. Forthe avoidance of doubt, the Parties expressly agree that if Fuel Shortage is caused by an actionor omission attributable to the Supplier, it shall not be reckoned for the purposes ofcomputing Availability hereunder. By way of illustration, the Parties agree that in the eventthe Non-Availability arising on account of shortfall in supply of Fuel is determined to be 50%(fifty per cent), the Supplier shall, with respect to the Non- Availability arising on accountthereof in accordance with the provisions of Clause 21.5.2, be entitled to a Fixed Charge as ifthe Availability is equivalent to 70% (seventy per cent) of such Non-Availability. For theavoidance of doubt, the Parties agree that the Supplier shall not be liable to pay the Damagesspecified in Clause 21.6.2 if Non-Availability shall arise as referred to in this Clause 21.4.2.

Provided however, the provisions of this Clause 21.5.2 shall come into effect only uponsubmission of a letter from the supplier of Fuel clearly indicating the reasons forshortfall in supply of fuel as compared to the terms of the Fuel Supply Agreement. Forthe avoidance of doubt the Supplier shall claim reduction in Minimum Fuel Stock inrelation to Dedicated Fuel as specified in Clause 22.4.1

1. Since, the tender is based on importedcoal from captive mines abroad, situationof fuel shortage is not only unlikely but itis also very difficult for the utility tovalidate and ascertain fuel shortagesituation

2. In order to minimize supply risks to theDISCOMS and also reduce unduefinancial burden on account of higherfixed charge in case of deemedavailability, provisions have beenmodified

3. Under the proposed provisions, nodeemed availability benefit shall beavailable to the developer in the scenarioof fuel shortage, however under fairpractice, no damages shall be levied if thedeveloper notifies fuel shortage

74 22.8.2 In the event of any Fuel Shortage hereunder, the Fixed Charge payable for and in respect ofany Non-Availability arising as a result thereof shall be equal to 70% (seventy per cent) of theFixed Charge computed in accordance with the provisions of Clause 21.4.2. [For theavoidance of doubt, the Parties expressly agree that no Fixed Charge shall be due or payablein respect of Non-Availability arising as a result of shortfall in supply of Fuel from any CoalMine/Blocks or Captive Mine owned or operated by the Supplier or its Associate.]

Same explanation as above

75 22.10.2 In the event the Supplier fails to procure Fuel under an AFSA, or such AFSA is not approvedin full or part by the Utility or the Commission, as the case may be, the Fixed Charge payablefor and in respect of any Non-Availability as a result thereof shall be equal to 70% (seventyper cent) of the Fixed Charge computed in accordance with the provisions of Clause21.4.2Intentionally left blank


Deviation 11: Adding provisions to collect more documentary evidences from suppliers to confirm readiness of plant andactual cost during operation

SL Section/ Clause Value/ Text Justification76 21.5.2 For the avoidance of doubt and by way of illustration, if the actual stock of Fuel is 80%

(eighty per cent) of the Minimum Fuel Stock at the commencement of any day, theAvailability for that day shall be deemed to be 80% (eighty per cent) and the Non-Availabilityon account of Fuel Shortage shall be notified by the Supplier to the Utility accordingly.Provided however, the provisions of this Clause 21.5.2 shall come into effect only uponsubmission of a letter from the supplier of Fuel clearly indicating the reasons forshortfall in supply of fuel as compared to the terms of the Fuel Supply Agreement. Forthe avoidance of doubt the Supplier shall claim reduction in Minimum Fuel Stock inrelation to Dedicated Fuel as specified in Clause 22.4.1

In order to ensure close monitoring of fuelsupply and avoid a situation where thedeveloper unduly notifies fuel shortage, thismonitoring provision has been included.

77 21.10.2 The Supplier shall, with each Monthly Invoice submit, …

(j) proof of payment of the transmission charges referred to in Clause 5.5; (k)proportionate adjustment on account of transmission losses to be determined inaccordance with Clause 5.6; (l) proof of payment of SLDC and/or RLDC chargesreferred to in Clause 5.7 (m) the net amount payable under the Monthly Invoice;(n)documentary evidence in support of actual quantum of Imported Fuel consumedduring the Month for generation of electricity from the Power Station and each of theUnits of the Power Station; and (o) copies of invoice raised by the supplier of ImportedFuel and bills paid in respect of Imported Fuel (p) in case coal is sourced from captivemines abroad, the Supplier shall submit monthly statement of cost of mining of coalfrom the captive mines abroad (q) documentary evidence of port handling chargesincurred by the Supplier and paid to the Port of unloading.

The Utility may in its own right and discretion require the Supplier to submit acertificate from the Statutory Auditor of the Supplier, certifying the payments madeand invoices raised by the Supplier in respect of Project Agreements including FuelSupply Agreement for Imported Fuel and cost incurred for mining of Imported Fuelwhere Imported Fuel is sourced from Captive Mines abroad. The Supplier, withinfifteen (15) days of receiving written request from the Utility, shall submit copy of such

1. As per the provision of the current PSA,payments by the utility shall not exceedactual cost incurred by the supplier

2. Hence, it is important to validate actualcost incurred by the supplier.

3. Proposed provisions enable the utility toknow the actual cost incurred by thesupplier and validate informationfurnished by the developer

certificate in the form and substance sought by the Utility78 22.8.1 In the event the Supplier anticipates a shortfall in the production of electricity for supply to

the Utility from Contracted Capacity on account of a shortfall in supply of Fuel, and/ordelays in transportation thereof, for reasons beyond the control of the Supplier (the “FuelShortage”), the Supplier shall, as soon as practicable but in any event no later than 7 (seven)days from the date when it anticipated the Fuel Shortage, notify the Utility of the nature,extent and period of Fuel Shortage and the reasons thereof. Provided however, theprovisions of this Clause 22.8.1 shall come into effect only upon submission of a letterfrom the supplier of Fuel clearly indicating the reasons for shortfall in supply of fuel ascompared to the terms of the Fuel Supply Agreement.


79 27.1.4 The Utility may in its own right and discretion require the Supplier to submit acertificate from the Statutory Auditor of the Supplier, certifying the payments made bythe Supplier in respect of Project Agreements including Fuel Supply Agreement forImported Fuel. The Supplier, within fifteen (15) days of receiving a written requestfrom the Utility, shall submit copy of such certificate in the form and substance soughtby the Utility.


Deviation 12: Adding clauses so that the Utility in no case pays more than the actual cost borne by the supplierSL Section/ Clause Value/ Text Justification80 22.2.3 The price of Fuel procured from Captive Mines situated outside India, or from a long-term

fuel supply contract in respect thereof, shall be the lower of, (i) the indicative price of theFuel at the normative GCV applicable to the Index named herein, and in case morethan one Index is used the arithmetic mean thereof, as the case may be, Free on Board(FOB), as specified in the Bid, in US cents; and (ii) 80% (eighty per cent)/ 85% (eighty fiveper cent)/ 90% (ninety per cent)29 of the price of Fuel computed with reference to thearithmetic mean of API4 Index (South Africa)30 or a substitute thereof as may be mutuallyagreed by the Parties, for a period of 180 (one hundred eighty) days immediately precedingthe date which is one month prior to the Bid Date , and the price of Fuel so determinedin US cents shall be increased every year at a compounded annual rate of 4% (four percent), commencing from the Accounting Year following the Accounting Year in whichthe Bid was received. The Parties further agree that the price of Fuel shall be converted intoIndian rupees at the commencement of every quarter and the exchange rate used for thispurpose shall be the mean of the buying and selling rate at the beginning of such quarteras notified by the State Bank of India or any substitute thereof. The Parties also agree thatthe supplier of Fuel shall be deemed to be a Contractor for the purposes of Article 28, andany change in law or taxes occurring in the jurisdiction where the Captive Mines are situateshall be deemed to be a Change in Law affecting the Supplier and its Associate, if any,under the provisions of Article 34. For the avoidance of doubt, the Supplier represents andwarrants that the Fuel Charge referred to hereinabove comprises of US cents … (US cents….) per kWh on account of cost of Fuel.

’The price of Fuel procured from Captive Mines situated outside India, or from along-term fuel supply contract in respect thereof, shall be the lower of, (A) ceiling priceof Fuel which shall be determined as the lower of (i) the indicative price of the Fuel inUS cents; and (ii) 90% (ninety per cent) of the price of Fuel computed with referenceto the arithmetic mean of HBA Indonesia or a substitute thereof as may be mutuallyagreed by the Parties, for a period of 6 (six) months immediately preceding themonth in which the Bid Date lies, and the amount so determined in US cents shall be

1. The current provisions of DBFOO protectthe utility to the extent that the paymentby the utility shall never exceed the actualcost.

2. However, in case of captive mines abroad,where the mine is owned by the developeror a related entity, “actual cost” cannot bereckoned easily

3. In order to protect the utility’s interest,provisions have been modified such that:(a) In case of captive mines abroad,

actual cost shall be lower of actualcost as per documentary evidencesubmitted by the supplier and 90% ofHBA Indonesia for the preceding 1month adjusted for GCV

(b) In case of fuel sources from long-termFSA with a third part, actual costshall be as per the invoice raised bythe third party coal supplier

4. An illustration has been added for the benefitof Suppliers.

5. I t should be noted that, MPSA clause usesmean of HBA index of past 180 days. SinceHBA index is a monthly index, the clause hasbeen modified. Instead of 1800 days, 6months have been used.

adjusted for GCV deviation such that the Fuel Charge payable by the Utility shall bethe same as if the GCV is in accordance with the Average GCV and increased everyyear at a compounded annual rate of 4% (four per cent), commencing from theAccounting Year following the Accounting Year in which the Bid was received and;(B) actual price of Fuel , adjusted for GCV deviation if any, which shall be reckoned as (i)actual cost as inferred from the documentary evidence in support of cost of miningfurnished by the supplier, incase coal is sources from a Captive Mine abroad , providedhowever, in the absence of such documentary evidence, actual price of Fuel shall bedeemed as the value of 90% HBA Indonesia for the preceding month and (ii) actual costas specified in the invoice raised by the Supplier of Fuel incase Fuel is sourced through along-term FSA with a third-party supplier of Fuel, provided however, submission ifinvoice shall be mandatory in case Fuel is sourced from third-party supplier of Fuel

For the avoidance of doubt and by way of illustration:SL Item Unit ValueA Cost of Imported Fuel (as per Bid) Cents/kWh 2B SHR as per 22.1.1 of PSA KCal/kWh 2000C GCV as per 22.3 of PSA KCal/Kg 5000

D = A x C/B Indicative cost of Imported Fuel (@ GCV =5000 KCal/Kg) Cents/Kg 5

E 90% of mean of Indonesia HBA index for past 6month (@ GCV = 6322 KCal/Kg) Cents/Kg 7

F = E x C /6322

90% of mean of Indonesia HBA index for past 6month adjusted for GCV deviation (@ GCV=5000 KCal/Kg)

Cents/Kg 5.54

G = min (D,F)

Ceiling on Price of Fuel (@ GCV = 5000KCal/Kg) Cents/Kg 5.00

H = G*(1+4%)

Ceiling on Price of Fuel in 2nd Accounting year(@ GCV = 5000 KCal/Kg) Cents/Kg 5.20

I Actual Price of Fuel in 2nd Accounting Year(@ GCV = 5000 KCal/Kg) Cents/Kg 4.9

J = min (G, I) Price of Fuel as per 22.2.3 in 2nd AccountingYear (@ GCV = 5000 KCal/Kg) Cents/Kg 4.90

K Exchange rate Rs/Cents 0.6

L = J x K Price of Fuel as per 22.2.3 in 2nd AccountingYear (@ GCV = 5000 KCal/Kg) Rs/Kg 2.94

81 22.2.5 The total cost of transportation of imported Fuel, forming part of the Landed Fuel Cost, shallbe the lower of, (a) the indicative cost of transportation as specified in the Bid, in US cents,and (b) [20% (twenty per cent)] of the price of Fuel, as specified in the Bid, and shall beconverted into Indian rupees at the commencement of every quarter and the exchangerate used for this purpose shall be the mean of the buying and selling rate at thebeginning of such quarter as notified by the State Bank of India or any substitutethereof, and to which lower of (a)110% (one hundred and ten per cent) of the freight payableto the Indian Railways, and (b) the actual cost of rail/road transportation shall be addedfor inland transportation, if any, and the total freight charges so determined as on the Bid Dateshall be revised from time to time to reflect the variation occurring in the Freight Index towhich actual port handling charges upon submission of relevant invoices shall be added:

1. The ocean freight cost is provided incents/Kg. Current clause is silent on howto convert this figure to INR/Kg. So theclause has been modified to direct theconversion procedure.

2. Payment for inland transportation shouldnot be more than the actual cost. To bringthis clarity, the clause has been changedaccordingly

3. Bidders, during the pre-bid conferencehave requested for inclusion of porthandling charges. Since this is a real costfor the developers and any under-recoverywould cause the bidders to load it in fixedcharges, provisions have been modified sothat actual port handling charges are paidto the supplier upon submission of bills

Deviation 13: Ensuring dispute resolution by state commission early in the stageSL Section/ Clause Value/ Text Justification82 36.2 In the event of any Dispute between the Parties, either Party may call upon the Utility’s

Engineer to mediate and assist the Parties in arriving at an amicable settlement thereof.Failing mediation by the Utility’s Engineer or without the intervention of the Utility’sEngineer, either Party may require such Dispute to be referred to the Chairman of the Boardof Directors of the Utility and the Chairman of the Board of Directors of the Supplier foramicable settlement, and upon such reference, the said persons shall meet no later than 7(seven) days from the date of reference to discuss and attempt to amicably resolve theDispute. If such meeting does not take place within the 7 (seven) day period or the Dispute isnot amicably settled within 15 (fifteen) days of the meeting or the Dispute is not resolved asevidenced by the signing of written terms of settlement within 30 (thirty) days of the noticein writing referred to in Clause 36.1.1 or such longer period as may be mutually agreed bythe Parties, either Party may approach state commission for resolution of dispute. referthe Dispute to arbitration in accordance with the provisions of Clause 36.3.

Electricity Act provides provision forparties to seek dispute resolution at statecommission. Dispute resolution byArbitration may consume more time andenergy. So provision of Arbitration hasbeen removed.

83 36.3 36.3 Arbitration Resolution Mechanism

36.3.1 Any Dispute which is not resolved amicably by conciliation, as provided inClause 36.2, shall be and is not required under Applicable Laws to be adjudicated or referredto arbitration by the Commission, and the same shall be finally decided. by reference toarbitration by an arbitral tribunal constituted in accordance with Clause 36.3.2. Sucharbitration shall be held in accordance with the Rules of Arbitration of the InternationalCentre for Alternative Dispute Resolution, New Delhi (the “Rules”), or such other rules asmay be mutually agreed by the Parties, and shall be subject to the provisions of theArbitration and Conciliation Act, 1996. The place of such arbitration shall be[Delhi/Mumbai/Chennai/Kolkata/Name of the place in the State] and the language ofarbitration proceedings shall be English.36.3.236.3.336.3.436.3.5


36.3.6

36.4 Adjudication by the Commission

36.5 Adjudication by tribunal84 Schedule J

Default EscrowAgreement12.1

Dispute resolution

12.1.1 Any dispute, difference or claim arising out of or in connection with thisAgreement, which is not resolved amicably, shall be decided finally by submitting it tostate commission per adjudication or arbitration under section 86 (1) (f) of ElectricityAct 2003.reference to arbitration to a Board of Arbitrators comprising one nominee of eachParty to the dispute, and where the number of such nominees is an even number, thenominees shall elect another person to such Board. Such arbitration shall be held inaccordance with the Rules of Arbitration of the International Centre for Alternate DisputeResolution, New Delhi (the “Rules”) or such other rules as may be mutually agreed by theParties, and shall be subject to the provisions of the Arbitration and Conciliation Act, 1996.

12.1.2 The Arbitrators shall issue a reasoned award and such award shall be final andbinding on the Parties. The place of arbitration shall be[Delhi/Mumbai/Chennai/Kolkata/Name of the place in the State] and the language ofarbitration shall be English.


85 Schedule KDeed of Hypothecation9.1

Dispute resolution

9.1.1 Any dispute, difference or claim arising out of or in connection with this Deed,which is not resolved amicably, shall be decided finally by submitting it to statecommission per adjudication or arbitration under section 86 (1) (f) of Electricity Act2003.reference to arbitration to a Board of Arbitrators comprising one nominee of each Partyto the dispute, and where the number of such nominees is an even number, the nomineesshall elect another person to such Board. Such arbitration shall be held in accordance withthe Rules of Arbitration of the International Centre for Alternate Dispute Resolution, NewDelhi (the “Rules”) or such other rules as may be mutually agreed by the Parties, and shall besubject to the provisions of the Arbitration and Conciliation Act, 1996.


9.1.2 The Arbitrators shall issue a reasoned award and such award shall be final and bindingon the Parties. The place of arbitration shall be [Delhi/Mumbai/Chennai/Kolkata/Name of theplace in the State] and the language of arbitration shall be English.

86 Schedule PSubstitution Agreement8.1

8.1 Dispute resolution

8.1.1 Any dispute, difference or claim arising out of or in connection with this Agreementwhich is not resolved amicably shall be decided by submitting it to State Commission peradjudication or arbitration under section 86 (1) (f) of Electricity Act 2003. reference toarbitration to a Board of Arbitrators comprising one nominee each of the Utility, Supplierand the Lenders’ Representative. Such arbitration shall be held in accordance with the Rulesof Arbitration of the International Centre for Alternate Dispute Resolution, New Delhi (the“Rules”) or such other rules as may be mutually agreed by the Parties, and shall be subject toprovisions of the Arbitration and Conciliation Act, 1996.

8.1.2 The Arbitrators shall issue a reasoned award and such award shall be final and bindingon the Parties. The place of arbitration shall be [Delhi/Mumbai/Chennai/Kolkata/Name of theplace in the State] and the language of arbitration shall be English.


Deviation 14: State Government owned engineer may be appointed as Utility’s EngineerSL Section/ Clause Value/ Text Justification87 Schedule I

Appointment ofutility’s engineerPoint 5

5 Appointment of government entity as Utility’s EngineerNotwithstanding anything to the contrary contained in this Schedule, the Utility may inits discretion appoint a government-owned entity as the Utility’s Engineer; providedthat such entity shall be a body corporate having experience in coal-based generationprojects; Notwithstanding anything to the contrary contained in this Schedule, the Utilitymay in its discretion appoint a government-owned entity as the Utility’s Engineer; providedthat such entity shall be a body corporate having as one of its primary function the provisionof consulting, advisory and supervisory services for engineering projects; provided furtherthat a government-owned entity which is owned or controlled by the State Government shallnot be eligible for4appointment as Utility’s Engineer.

In order to have flexibility in appointingreputed Government (state/central) owned andoperated entities such asNTPC/NLC/APGENCO as Utility Engineer,provisions have been modified.

Deviation 15: Other changesSL Section/ Clause Value/ Text Justification88 4.1.3 (c) executed/amended/supplemented the Fuel Supply Agreement to meet PSA agreement

executed all necessary Agreements for Coal Mine/Blocks

During the RFQ stage, the bidders wereasked of FSA. And most of them haveexecuted agreement with suppliers. Sopost PSA sign, they need to amend orsupplement the FSA to meet PSArequirement.

89 6.1.2 The Utility agrees to provide support to the Supplier and undertakes to observe, comply withand perform, subject to and in accordance with the provisions of this Agreement andApplicable Laws, the following:

(c) make best endeavours to procure that no local Tax, toll or charge is levied orimposed on the use of whole or any part of the Power Station;[omitted](e) undertake rehabilitation and resettlement of persons affected by constructionof the Power Station and bear all costs and expense in respect thereof, save and except asotherwise provided in this Agreement[omitted];

All applicants have commencedconstruction and are either commissionedor in advanced stage of completion. Sothese two clauses are not relevant toUtility. These clause may make Utilitysusceptible to unnecessary risk in thefuture. So these clause have beenremoved.

90 14.1.2 In the event COD is achieved prior to the Scheduled Completion Date, the Fixed Charge dueand payable to the Supplier for the period prior to the Scheduled Completion Date shall be[70% (seventy per cent)] of the Base Fixed Charge specified in Clause 21.2.1. Provided,however, that no payment on account of Fixed Charge hereunder shall be due or payable forany period prior to [365 (three hundred and sixty five)] days from the Scheduled CompletionDate.

The Utility has clearly communicated theSupply date from beginning of the tenderprocess. The state does not foresee anypower requirement before such time. Sothe Utility does not want to entertain CODprior to SCOD.

91 22.3.7 If the sampling pursuant to Clause 22.3.6 demonstrates that the actual GCV determined forany month is more than the GCV reported by the Supplier to the Utility or the Average GCVdetermined in accordance with the provisions of Clause 22.3.2, as the case may be, theAverage GCV for that month shall be deemed to be the higher lower of the GCV determinedby such sampling and the Average GCV determined pursuant to the provisions of Clause22.3.2, and in the event of any Dispute relating to sampling, the Dispute ResolutionProcedure shall apply.

Lowering GCV value shall increase fuelcharge and thus, burden on DISCOM.

92 28.7.4 It is hereby clarified that the compensation received by the Supplier from other long In case, the supplier has received

term contracts with the Power Station or insurance claims as the case may be shall bededucted from allocation of costs under this Article 28.7 and no relief shall be availableto the Supplier under this Agreement.

compensation from other Utility orInsurance due to Force Majeure, claimfrom this Utility shall be deductedaccordingly