DISTRIBUTION FRANCHISE AGREEMENT FOR KHURDA ELECTRICAL DIVISION, KHURDA

This Agreement is made on this 5th day of January 2013 at Bhubaneswar between Central Electricity Supply
Utility of Odisha, a Utility created pursuant to the Central Electricity Supply Utility of Odisha (Operation &
Management) Scheme 2006 framed by OERC under Section 22 of the Electricity Act 2003 having its
principal office at 2nd Floor, IDCO Towers, Janpath, Bhubaneswar - 751022, hereinafter referred to as
CESU (which expression unless repugnant to the context or meaning thereof shall include its successors
and assigns) of the ONE PART
And
Feedback Energy Distribution Company Pvt. Ltd. FEDCO, a wholly owned subsidiary of Feedback
Infrastructure Services Pvt. Ltd. a company registered under the Companies Act, 1956 having its registered
office at 311,3rd Floor, Vardhaman Plaza, Pocket 7, Plot No. 6, Sector 12, Dwaraka, New Delhi-110075,
hereinafter referred to as the Distribution Franchisee (which expression unless repugnant to the context
or meaning thereof shall include its successors and permitted assigns) of the OTHER PART.
Each referred to as a Party and together as Parties.
WHEREAS:
A) CESU is a Deemed Distribution Licensee under the provisions of the Electricity Act, 2003 (the Act)
having license to supply electricity in certain areas of the State of Odisha.
B) Under the provisions of the Act, CESU is entitled to distribute electricity to a specified area within
its area of supply through another person referred to as Franchisee.
C) Commission desired that since huge losses to the extent of 70% prevalent in the LT Side of majority
divisions under DISCOMs, a way should be found out to arrest the huge losses by engaging CAPEX
based franchisees urgently.
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D) M/s CRISIL Risk & Infrastructure Solutions Ltd.(CRIS) has been engaged by CESU as Transaction
Advisor (Consultant) for identification and selection of project developers (Franchisees) for the
implementation of Smart Grid Solution for Energy Management & Energy Efficiency (SGS-EMEE) on
additional revenue sharing BOT model for the reduction of AT&C loss to about 15% in the
franchisee area.
E) CESU had floated an Expression of Interest (EOI) for twelve divisions to receive the proposal from
the prospective project developers (franchisees) for implementation of (SGS-EMEE) deploying the
BOT model on incremental revenue sharing basis. .
F) Five firms participated and submitted both technical and financial proposal as per RFP (Request for
Proposal) document for the selection as Input Based Franchisee.
G) On the evaluation of the tender documents (RFP documents), M/s Feedback Infrastructure Services
Pvt. Ltd. has became successful and accordingly duly selected as Input Based Franchisee with
Incremental Revenue Share (IBFIRS) model for Khurda Electrical Division (KED Khurda), a part of
Electrical Circle-II, Bhubaneswar as more particularly described hereinafter and referred to as the

Franchise Area,.
H) Accordingly, CESU issued a Letter of Intent No. 33422 dated 19.10.2012 to the M/s Feedback
Infrastructure Services Pvt. Ltd. and the same had been accepted by M/s Feedback Infrastructure
Services Pvt. Ltd.
I)

M/s Feedback Infrastructure Services Pvt. Ltd. has incorporated a Special Purpose vehicle by the
name M/s Feedback Energy Distribution Company Pvt. Ltd. FEDCO and has requested CESU to
enter into this Distribution Franchise Agreement (DFA), vide its letter no. nil dt.30.10.2012.

J)

M/s Feedback Energy Distribution Company Pvt. Ltd. FEDCO will sign the Distribution Franchisee
Agreement (DFA) with CESU and take up the responsibility of executing & delivering the obligations
as Input Based Franchisee with Incremental Revenue Share (IBFIRS) model committed by M/s
Feedback Infrastructure Services Pvt. Ltd. under the Smart Grid Solution for Energy management &
Energy Efficiency (SGS-EMEE) project.

K) The parties have agreed to record the terms and conditions for distribution of the electricity within
the Franchise Area by executing this indivisible Distribution Franchise Agreement, as detailed in
subsequent paras.
L) The parties are fully aware that this Agreement is for distribution of electricity in franchise area
through the Distribution Franchisee as contemplated under the Electricity Act, 2003. (Section 14
proviso 7).
NOW, THEREFORE, IN VIEW OF THE FOREGOING PREMISES AND IN CONSIDERATION OF THE MUTUAL
COVENANTS, PREMISES AND AGREEMENTS CONTAINED HEREIN, THE PARTIES AGREE AS FOLLOWS:

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1.

DEFINITION OF TERMS
For the purpose of this Distribution Franchise Agreement (including all its annexures), the following
terms, phrases and their derivations shall have the meanings given below unless the context clearly
mandates a different interpretation. Where the context so indicates, the present tense shall imply
the future tense, words in plural include the singular, and words in the singular include the plural.
The word shall is always mandatory and not merely directory. The definitions are applicable
regardless of whether the term is written in capital letters.

1.1

AB Cables
Shall mean Aerial Bunched Cables

1.2

Act
Means the Electricity Act, 2003, as amended from time to time

1.3

Agreement Representative
Shall mean the persons, nominated by the Parties as set forth in Article-19.4

1.4

AMR
Means Automatic Meter Reading System

1.5

AT&C loss
Expressed in percentage and shall be computed as follows:
AT & C Loss = (1- (Billing Efficiency*Collection Efficiency))*100

1.6

Base Year
Shall mean the financial year 2011-12 (refers to April 1 to March 31)

1.7

Billing Efficiency
Shall mean the ratio of energy actually billed to consumers in units and total energy input in that
area, in percentage terms for a particular period and shall be calculated as below:
Billing Efficiency = (Billed Energy (Sale) to Consumers / Total Input Energy)*100

1.8

Collection Efficiency
Shall mean the ratio of revenue actually realized from consumers and energy billed to Consumers,
in percentage terms for a particular period and shall be calculated as below:
Collection Efficiency= (Revenue realized from Consumers/ Energy Billed to Consumers) * 100

1.9

Consumer
Shall mean as defined under the Act and the Supply Code. For the purpose of this agreement
Consumer shall include all HT & LT Consumers and exclude EHT Consumer.

1.10

Contract Year
Shall mean each successive period of one year beginning from the Effective Date of this Agreement.

1.11

Complaint
Shall mean any written or electronic correspondence by a Consumer expressing dissatisfaction with
products or services of the Distribution Franchisee.
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1.12

Distribution System
Means the system of wires and associated facilities between the delivery points on the
transmission lines or the generating station connection and the point of connection to the
installation of the Consumers in the Licensee Area. It means the supply and conveyance of
electricity by means of distribution system. Distribution System shall comprise CESU Distribution
System and Franchisee Distribution System.

1.13

CESU Distribution System

Shall mean the HT and EHT network component of Distribution System

1.14

Franchisee Distribution System

Shall mean (i) LT network component commencing from the secondary side of the distribution
transformers and (ii) service line connections of HT Consumers forming part of the Distribution
System.

1.15

Distribution Assets
Shall mean the distribution assets employed by the Distribution Licensee/ Distribution Franchisee
in the Franchise Area for distribution of electricity.

1.16

CESU Distribution Assets

Shall mean the assets created and employed by CESU in the Franchise Area for distribution of
electricity.

1.17

Franchisee Distribution Assets

Shall mean the distribution assets created and employed by Distribution Franchisee in the
Franchise Area for distribution of electricity.

1.18

DF
Shall mean Distribution Franchisee

1.19

Distribution Losses
Distribution Loss = (1- Billing Efficiency)*100

1.20

Effective Date
Shall mean the date of handing over of the business operations of Franchise Area by CESU to the
Distribution Franchisee pursuant to this Agreement after the conditions precedents are satisfied.
Such date shall be indicated by the Distribution Franchisee and accepted by CESU which shall not
be later than 60 days from the date of signing of this agreement unless mutually agreed otherwise.
Such date shall be the 1st day of the English calendar month, unless mutually agreed otherwise.

1.21

Engineer-in-Charge
Each of the Parties shall designate an Engineer-in-charge who is duly authorized to act on behalf of
the respective Parties, to liaise for purposes of and carry out Agreement Management pertaining to
the management of all matters related to the compliance with the requirements of this Agreement.
The Engineer-in-charge shall be of the rank of Superintending Engineer or equivalent and above
from CESU and a rank of General Manager and above from Distribution Franchisee.

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1.22

Expert(s)
Shall mean the person(s) identified as the members of the working team at the time of signing the
agreement or any other person(s) of similar experience and expertise.

1.23

Expiry Date
Shall mean sixty months from the Effective Date.

1.24

Expiry Payment
Shall mean the payment to be made on expiry of the Agreement by either Party to the other Party
as per Article - 16.8.

1.25

Extra High Voltage or EHV

Shall mean any voltage above 33,000 Volts subject to permissible variations

1.26

EHT Consumer
Shall mean any Consumer catered to at EHV.

1.27

Franchise
Means the rights granted by CESU to the Distribution Franchisee or DF to act as a franchisee of
CESU to distribute electricity in the Franchise Area and all the rights, powers and authorities
available to CESU as a distribution licensee necessary to fulfill the obligations and responsibilities as
contemplated under this Agreement and which can be conferred upon the Distribution Franchisee
under the Act.

1.28

Franchise Area
Shall mean the area as mentioned in the Article - 4.3 in respect of which the Distribution Franchisee
shall act as a franchisee of CESU.

1.29

Force Majeure
Without limiting the general limitations of liability in any way arising under this Agreement neither
party is responsible for failure or delay in performance of services or obligations hereby undertaken
due to occurrence of any event of force Majeure including acts of God, acts of any Government (de
jure or de facto) or regulatory body or public enemy, war, riots, embargoes, industry-wide strikes,
or contingencies, whether of a similar or dissimilar nature to the foregoing, beyond the parties
control, which cannot be reasonably forecast or prevented, thereby, hindering the performance by
the parties of any of their obligations hereunder.

1.30

GoO
Shall mean the Government of Odisha and any Ministry, Department, or any other Authority of the
Government of Odisha.

1.31

GRIDCO
Shall mean GRIDCO Limited or its successors.

1.32

HT Consumer
Shall mean the Consumers being served through High Tension Supply lines as defined in Supply
Code.
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1.33

Input Energy
As recorded in Apex Meters installed in OPTCL Grid on the 33 KV side of Power transformers less
consumption of station transformers of imports / export from interdivision / inter-discoms and /
or any other sources like CGP/CPP/IPP or renewable sources connected at 11kV or 33 kV line
(please refer to Annexure 20.1)

1.34

Input Point
Shall mean the supply point at OPTCL apex meter installed in 33 KV side of 132/33 KV and 220/33
KV transformers and import points which feed energy to the Franchise Area at 11 KV /33 KV (please
refer to Annexure 20.1). Any change in export or import point shall be updated after joint
verification by the Distribution Franchisee and CESU.

1.35

Major Incident
Means an incident associated with the Distribution and retail supply of electricity in the Franchise
Area, which results in a significant interruption of service, substantial damage to equipment, or loss
of life or significant injury to human beings and shall include any other incident, which CESU
expressly declares to be a major incident. Significant interruption of service for this purpose shall
mean interruption impacting more than 10% Consumers continuously for a period of more than 24
hours and substantial damage to equipment shall mean damage to Distribution Assets exceeding
10% or more of average monthly revenue.

1.36

OERC
Shall mean the Odisha Electricity Regulatory Commission, or its successors.

1.37

OPTCL
OPTCL shall mean the Odisha Power Transmission Company Limited and its successors and assigns.

1.38

Law
Means, in relation to this agreement, all laws in force in India and would include any statute,
ordinance, regulation, notice, circular, code, rule or direction, or any interpretation of any of them
by a Governmental instrumentality and also includes all applicable Rules, Regulations, Orders,
Directions, Notifications by a Governmental instrumentality pursuant to or under any of them and
shall include all Rules, Regulations, Decisions, Directions and Orders of OERC.

1.39

Low Tension (LT) Consumer

Shall mean the Consumers being served through Low Tension Supply lines as defined in Supply
Code.

1.40

Person
Shall include any company or body corporate or association or body of individuals, whether
incorporated or not, or artificial juridical person.

1.41

Prudent Utility Practices

Shall mean the practices, methods and standards that are generally accepted nationally from time
to time by electric utilities for the purpose of ensuring the safe and efficient distribution of
electricity, operation and maintenance of Distribution Assets, billing and collection of distributed
power etc.
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1.42

Public Right of Way

Shall mean the surface, the air space above the surface, and the area below the surface of any
public street, highway, lane, path, alley, sidewalk, bridge, tunnel, parkway, waterway, easement, or
similar property within the Franchise Area, which, consistent with the purposes for which it was
dedicated, may be used for the purpose of installing and maintaining the system. No reference
herein to a Public Right-of-Way shall be deemed to be a representation or guarantee by CESU
that its interest or other right to control the use of such property is sufficient to permit its use for
such purposes, and the Distribution Franchisee shall be deemed to gain only those rights to use as
are vested in CESU and as the CESU may have the right and power to give.

1.43

Revenue Per Unit (RPU)

Shall mean the total Energy Charges (EC) for a specified period divided by Input Energy (IE, as per
Article 1.33) during the same period. The same shall be computed as per Article 8.1.2.

1.44

SLDC
Shall mean the State Load Dispatch Centre of Odisha.

1.45

Smart Meter
Shall mean AMR / AMI enabled energy meters having facilities of remote reconnection /
disconnection, enhance / reduce the load and the remote meter reading

1.46

Special Arrear
As per the order of Honble High Court dated 30 March 2012 arrears of single phase domestic
consumers for FY 2011-12 are being billed to such consumers in eight installments commencing
from August 2012 to March 2013. Special Arrear shall mean such arrears billed to these consumers
in installments as stated above.

1.47

Special Purpose Vehicle (SPV)

SPV shall mean the company incorporated or to be incorporated under the Companies Act,1956
by the Selected Bidder solely for the purpose of carrying out the obligations under the Distribution
Franchisee Agreement and to undertake the Distribution of electricity as per terms of the
Distribution Franchisee Agreement.

1.48

Supply Code
Shall mean OERC Distribution (condition of Supply) Code 2004, as amended from time to time.

1.49

Termination Payment
Shall mean the payment to be made on Termination of the Agreement by either Party to the other
Party as per Article - 16.9 and Article - 16.10.

2.

CONDITIONS PRECEDENT & SUBSEQUENT TO THE AGREEMENT

2.1

Conditions Precedent To Be Satisfied By The DF & CESU

2.1.1

Submission of Performance Guarantee

The Distribution Franchisee (DF) shall secure the guarantee to perform by providing Performance
Guarantee to the satisfaction of CESU from any nationalized bank or Scheduled Bank for an amount
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equivalent to INR 1 crore per division in the form of Bank Guarantee (BG) payable at Bhubaneswar
Branch. This Performance Guarantee shall be governed as per conditions stipulated in Article 9.2
2.1.2

Submission of Payment Security Deposit

The DF shall secure the Payment Security Deposit by providing a Bank Guarantee to the satisfaction
of CESU from any nationalized bank or Scheduled Bank payable at Bhubaneswar Branch, for an
amount equivalent to 7 days of average revenue collected in the base year. This Bank Guarantee
shall be governed as per conditions stipulated in Article- 9.1

2.1.3

Completion of Audit of Various Parameters

DF shall complete its due diligence of the franchise area & validate the following base line data as
provided at the time of issuing Letter of Intent:

2.1.3.1 Base Year AT&C Losses;

2.1.3.2 Base Year level of Input Energy;
2.1.3.3 Base line RPU
2.1.3.4 Ongoing Contracts in the Franchise Area pertaining to billing and collection as on Effective Date;
2.1.4

Meter Reading
CESU and the DF shall conduct a joint metering reading of the interface meters at the Input Points.
The DF may request for a calibration of the meter if so required. [This reading is to be taken at the
00:00 hrs of the day of taking over.]

2.1.5

Business Plan Distribution Franchisee

The DF shall submit its Business Plan (as Annexure 20.11) in the DFA to CESU and the same shall
form a part of the agreement. The Business Plan shall be as per Article 5.1.3. The Works Plans are a
subset of the Business Plan shall be attached at Annexure 20.6, Annexure 20.7 and Annexure 20.8.

2.1.6

DF shall submit a commitment bond for all the Experts. In case of any change in the Expert, the DF
shall replace person of similar or better experience, expertise and qualification.

2.1.7

Capital Expenditure Plan CESU

CESU shall share with the Distribution Franchisee the proposed Capital Expenditure Plan in the
Franchise Area proposed to be implemented in a period of four years. Please refer to Annexure
20.5 for the approved Capital Expenditure plan of CESU.

2.1.8

If, the Distribution Franchisee fails to satisfy Article 2.1.1 to Article 2.1.5, within the stipulated
duration, CESU shall be entitled to terminate this Agreement and forfeit the earnest money deposit
of the Distribution Franchisee at its discretion.

2.2

Conditions Subsequent To Be Satisfied By the DF & CESU

2.2.1

CESU shall identify the Consumers for which Service Connection Charges (SCC) have been received
by it, but connections have not been provided. The Distribution Franchisee shall be responsible for
providing connection to these Consumers. The installation material for such connections shall be
issued by CESU to the Distribution Franchisee and further supervision charges received from the
Consumers, if any, towards such connections shall be remitted to the Distribution Franchisee.
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2.2.2

The authorized officers of Distribution Franchisee shall be authorized, under Section 126, Section
135,Section 151 and Section 152 of Electricity Act 2003 for taking necessary action to prevent the
unauthorized use, theft & pilferage of electricity in Franchisee Area, subject to approval from GoO
& OERC.

2.2.3

The Distribution Franchisee may suggest the required network improvement in CESUs government
funded capital expenditure plan. CESU shall consider the same while preparing the subsequent
phase of Capital Expenditure Plan.

2.2.4

The Joint Audit Team of CESU and the DF shall complete an audit of Asset Register as on Effective
Date
All the conditions subsequent stated above shall be satisfied within 2 (two) months time from the
Effective Date.

3.

DURATION OF AGREEMENT

3.1

Duration of Agreement
The duration of this Agreement shall be for a period of sixty months from the Effective Date.

3.2

Provision for New Agreement beyond 5 years

Depending on the performance of the DF, CESU may consider to negotiate a new contract on
mutually agreed terms and conditions. The DF will have to apply formally in writing for new
contract at least 18 (eighteen) months prior to the expiry of the Franchise Agreement.
While entering into the new contract with the DF, CESU may consider inter-alia:-

3.2.1

Unrecovered meter rent installed by the DF

3.2.2

Extra expenditure made by the DF beyond the Capital Expenditure Plan as per this agreement.

3.3

Early Termination
This agreement can be terminated before the expiration of the Franchise Period as per the
provisions of Article-16 and Article-3.4of this Agreement.

3.4

Event Of Abandonment
If the DF ceases to operate all and/or any substantial part of the Franchisee Distribution System for
a period of forty eight (48) consecutive hours without the prior written consent of CESU, then this
would be treated as an event of abandonment and CESU or its designates shall be entitled to
immediately enter any and/or all of the site(s) and operate the Franchisee Distribution System,
provided however that:
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An event of abandonment shall not have been set to occur, if the cessation of operation has
resulted from (i)

an event of Force Majeure; or

(ii)

a scheduled outage

(iii)

non-supply of power by CESU during the said period

It is however expressly agreed that if the DF is proceeding with diligence and good faith to
overcome or remedy such event and such event is overcome or remedied within a further period of
forty eight (48) hours, then such an event shall not be treated as an event of abandonment.
It is hereby expressly agreed that all third party liabilities arising out of the event of abandonment
shall be borne by the DF alone. The DF shall indemnify and hold CESU harmless against the same as
provided in Article - 13.1.1 .The DF shall compensate CESU for the losses suffered by CESU, if any,
as provided in Article - 13.2.1.

3.5

Training & Workshop

In case Article 3.2 is not exercised, the Distribution Franchisee shall provide for Training and
Knowledge Transfer to CESU employees six (6) months prior to expiry date. The Distribution
Franchisee shall provide a minimum of 4 workshops and 3 weeks of On-the-job Training to CESU
Employees. The dates of the trainings and workshops shall be finalized in consultation with CESU to
ensure smooth transitioning.

3.6

Survival
The expiry or termination of this Agreement shall not affect accrued rights and obligations of the
parties under this Agreement, nor shall it affect any continuing obligations for which this
Agreement provides, either expressly or by necessary implication, the survival of, post its expiry or
termination.

4.

GRANT OF DISTRIBUTION FRANCHISE

4.1

Grant of Franchise
Subject to the terms and conditions of this Agreement, and Section 14 Proviso 7 and Section 2(49)
of the Act, CESU agrees to supply electricity to the DF for further distribution to Consumers in the
Franchise Area and the DF hereby agrees that it shall perform all the obligations and accept all the
liabilities of CESU as the Distribution Licensee for the Franchise Area in respect of Franchisee
Distribution System and Distribution Assets as stipulated in the Law, Regulations and Directives of
OERC issued from time to time, as if they were to apply to the Distribution Licensee and any other
activities as stipulated in this Agreement. In consideration of the above, the DF shall have Right to
Use the CESU Distribution Assets and all other rights, powers and authorities available to CESU as
a Distribution Licensee to perform its obligation under this Agreement. Distribution Franchisee
however shall not be the owner of CESU Distribution Assets.

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4.2

Exclusivity
The DF will be the exclusive franchisee of CESU in the Franchise Area in respect of the Franchisee
Distribution System and the Distribution Assets. The DF shall not be entitled to assign or transfer in
any manner its rights and obligations under this Agreement to its affiliate or any other third party
without prior consent of CESU. However the DF may appoint sub-contractor (s) for outsourcing
some of its activities with a prior written intimation to CESU.
It is however clarified that the DF alone shall be liable and responsible to CESU for the due
performance of this Agreement and any default / breach of any of the terms and conditions of this
Agreement by any such sub-contractor shall be deemed to be a default / breach by the DF.

4.3

Franchise Area
The Franchise Area shall mean the area referred to Khurda Electrical Division, Khurda as described
in the Annexure -20.1. The Franchise Area shall be one Electrical Division containing at present the
Input Points and output points as detailed in Annexure 20.1. In case the details provided in the
Annexure 20.1 are different from the Joint Audit report, the conclusions of the Joint Audit report
shall be final and Annexure 20.1 shall stand amended accordingly. Any changes/modifications
done in the Input and output points during the duration of the agreement shall be incorporated in
the same day in the Annexure 20.1 when the change is effected.

4.4

Effect of Acceptance
By accepting the Franchise and executing this Distribution Franchise Agreement (DFA), the DF
accepts and agrees to comply with the provisions of this Distribution Franchise Agreement and the
Act.

4.5

Directions
The DF shall comply with CESU directives issued for compliance of the Laws, Regulations, Orders
(includes CESUs order from time to time) and Directives of OERC and all other prevailing law of the
land.

4.6

Intent
It is the intent of both the parties that each party shall enjoy all rights and be subject to all
obligations of this Distribution Franchise Agreement for the entire term of the Agreement and to
the extent any provisions have continuing effect, after its expiry.

4.7

This Distribution Franchisee Agreement is Input Based Franchisee with Incremental Revenue Share
(IBF-IRS)

4.7.1

CESU shall make payment to the DF for DFs revenue share which shall be calculated as per Article
8.1 of this Agreement. DF shall submit a claim for the portion of DFs Revenue Share and other
collection if any remitted to CESU as per Article 8.2.1.
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5.

DUTIES AND RESPONSIBILITIES OF THE DISTRIBUTION FRANCHISEE

Duties and Responsibilities of the DF shall be as follows:

5.1.1

Undertaking the obligations and discharging all duties and responsibilities of the Distribution
Licensee in the Franchisee Area as stipulated in Electricity Act, 2003 and corresponding regulations
as if they were to apply to the Distribution Licensee and as per the contract agreement;

5.1.2

Distribution Franchisee shall prepare a loss reduction trajectory taking into account (i) achievement
of Revenue per Unit (RPU) equal to or more than Bulk Supply Tariff (BST) latest within 25th month
assuming the growth in current BST and retail tariff at an annual rate of 10% and (ii) achieving
AT&C loss level of about 15% by 60th month;

5.1.3

Based on the above AT&C loss reduction trajectory, the DF shall work out a Business Plan
incorporating (i) capital works like laying of AB Cable and installation of LT Capacitor banks, (ii)
repair and maintenance jobs in the LT network, (iii) operational plan for the LT network, (iv)
consumer services, (v) Installing Smart Meters etc. This Business Plan shall be a rolling plan updated
at the beginning of every Contract Year. The Business Plan shall be deemed to form part of the
Agreement and Distribution Franchisee shall adhere to the above Business Plan. The Business Plan
must include capital expenditure and operational expenditure plan along with a yearly cash flow
statement justifying the viability of operations. AT&C loss reduction trajectory as per Business Plan
during performance of its obligations shall be critical as per Article 20.9. The Business Plan shall
cover the following
a) Installing check meters at Input Points and cross over points to the extent check meters are not
installed there. Responsibility of installing main meters lies with CESU and check meters shall
be installed by the DF in their respective Franchise Area
b)

Installing 100% Smart Meters at 11 KV feeders for energy audit purpose and installing Smart
Meters to DTRs.

c) Installing Smart Meters in respect of Consumers having loads (i) up to 10 kW in the first twelve
months of operation and (ii) up to 5 kW, 3 phase LT connection within twenty four months
d) Installing Smart Meters in respect of all other Consumers (except BPL consumers) and other
than those at (c) above within the shortest possible time. For BPL consumers conventional
meters shall be provided and the DTR feeding to such consumers shall have Smart Meter
e) Providing all the last mile infrastructure requirements from distribution transformers (DTR)
onwards up to consumer premises and include DTR meters (Smart Meters), consumer meters,
AMR, AB Cables, automation, as well as related technology induction
f)

Laying of AB Cables in theft prone areas not less than 20% of total LT line in Franchisee Area

g) Installing LT Capacitor banks on the secondary side of the distribution transformer wherever
power factor is 0.80 or below
h) Undertaking operation, repair & maintenance, safety and security of the distribution assets
from secondary side of the DTR onwards as per Prudent Utility Practices and the standards that
may be prescribed by OERC. Distribution Franchisee shall plan such repair and maintenance
jobs to improve efficiencies, upgrade infrastructure including replacement of Distribution
Assets
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The above activities shall include replacement of LT Poles and conductors. However,
replacement of Poles shall be minimum 3% per annum and for conductors 5% per annum. Any
unutilized limit from previous contract years can be utilized in the current contract year e.g. if
in year 1 the replacement of poles was done to the extent of 1% then in the second year the
minimum will be 5%. In case any replacement is done in excess of the above limit in any year
then the minimum stipulated percentage for the subsequent years can be adjusted accordingly.
e.g. if in year 1 the replacement of poles was done to the extent of 5% then in the second year
the minimum will be 1%.
i)

Maintaining the existing distribution network and meters including repair of the same from
the secondary side of the DTR. Subject to the provisions of sub clause (j) DF shall also be
responsible for replacing failed distribution transformers from CESUs imprest stock

j)

Maintaining and/or replacing failed distribution transformers within the prescribed time
frame including repair of the same if so required by CESU against specific and separate
work order at CESUs approved schedule of rates

k) Restoration of 11 kV/33 kV line or DTR Oil filtering, though not in the scope of Franchisee,
can be taken up by franchisee with the consent of CESU on cost reimbursement basis
The Business Plan so furnished shall be approved by the CESU.

5.1.4

Improving quality of service and enhancing Consumer satisfaction with provision of Consumer
call centers, mobile fuse call and maintenance centers, as required;

5.1.5

Undertaking reading of meters, generation of bills, distribution of the same on monthly basis
and bill collection from the consumers in the Franchisee Area, as per the retail tariff structure
determined by OERC and abiding by the Conditions of Supply laid down under the license
conditions thereof;

5.1.6

Collecting the revenue through electronic means like spot collection machines should be
encouraged. Use of manual money receipts as far as practicable should be reduced to zero.
On-line arrangement shall be made for collection so that when any amount is collected and
money receipt is issued by the DF, the data shall be transferred on line on real time basis to
CESU;

5.1.7

Establishing easy payment option facilities for the consumers to pay their electricity bill. Door
to door collection should be discouraged. Wherever door to - door cash collection if required,
the amount so collected shall be promptly deposited in the CESUs account as per the
conditions mentioned in this Agreement;

5.1.8

Making payment to CESU as per the terms and conditions of this Agreement;

5.1.9

Collection of arrears as an agent of CESU, and remittance of the same as per the terms and
conditions of this Agreement;

5.1.10

Generating Management Information System (MIS) periodically and monitoring reports in

prescribed formats and online communication of the same to CESU. Furthermore, all data
regarding billing, collection and other related works shall be provided to CESU on regular basis
in agreed electronic format as provided by CESU;
Page 13 of 62

5.1.11

Franchisee shall use its own IT infrastructure including hardware, software and network and
shall not use existing IT Infrastructure and resources of CESU after the hand-holding period;

5.1.12

Interface method, CESUs server credentials and data format shall be provided by CESU within
one month from the effective date;

5.1.13

On the event of taking over the DF area by CESU from the DF during the contract period or
after the expiry date of contract, to ensure the smooth transition of takeover, the DF shall hand
over, network infrastructure, the data, the software licenses including smart meter
communication software (Graphic User Interface, Character User Interface, Application
Programming Interface, Libraries Configurations, user manuals, operations and troubleshooting
manuals) duly imparting training to CESU staffs;

5.1.14

Constructing LT lines against deposit works / Remunerative Scheme conforming regulations of

OERC, while providing new connection to consumers in its franchisee area;

5.1.15

DF may install the test benches for testing single phase meter at division level and for testing 3
phase /Smart Meters at Circle level as per their requirement;

5.1.16

Carrying out monthly energy audit on distribution transformer wise and 11 kV feeder-wise

5.2

Use of CESU Distribution Assets

5.2.1

The DF shall be entitled to use the CESU Distribution Assets to perform its obligation under this
Agreement. CESU shall however, continue to be the owner of such assets.

5.2.2

The DF shall restore all assets which are damaged beyond repair and shall provide necessary
information to CESU to identify the scrap against its Asset register.

5.2.3

On termination/ expiry of this agreement, the DF shall without demur hand over physical
possession/ custody of CESU Distribution Assets in same condition, subject to normal wear and
tear.

5.2.4

If Distribution Franchise requires to use any assets owned by CESU that have not been
transferred as envisaged in this agreement, CESU will on its discretion allow usage subject to
separate charges for the use of the same.

5.2.5

The Distribution Franchisee shall not use any assets owned by CESU for any other use except
for distribution of electricity and activities concerned with the subject of this Franchisee
Agreement.

5.3

New Distribution Assets attracting Capital Expenditure

5.3.1

Distribution Franchisee may apply to CESU to undertake the unallocated and/or delayed capital
works, those are being executed or to be executed by CESU in the Franchise Area at the
predetermined contract order cost or CESUs approved schedule of rates. After approval from
CESU, the DF can execute such work as per CESUs satisfaction. Further, all such assets shall
form a part of the CESU Distribution Asset.

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5.3.2

The Distribution Franchisee shall also maintain a separate record of the Distribution Assets
commissioned / installed by it with all details and particulars. It shall also make entries of these
assets in the asset register.

5.3.3

Such assets in normal working condition shall be transferred to CESU at no cost in case of
Expiry or Termination in the case of Distribution Franchisee Event of Default as per Article 16.8
and Article 16.10. However, in case of Termination on account of CESU Event of Default, CESU
shall take the same on the books of account at the depreciated value, computed as per the
costs and depreciation rates as approved by OERC.

5.3.4

If any new asset added by the Distribution Franchisee is not featuring in the list provided to
CESU, the cost of the same shall be ascertained quarterly by an independent agency appointed
by CESU for the purpose. The depreciation rate for such asset, if not appearing in the list
provided to CESU, shall be taken as per the prevailing OERC Regulations at that time.

5.3.5

The Distribution Franchisee shall submit details of the assets added by it on a quarterly basis,
and the value of such assets shall be certified by CESU as acceptable in terms of Article 5.3.3
and Article 5.3.4. Such certification shall be done within a period of 30 (Thirty) days.

5.4

Inventory of O&M Spares for DTR downwards Assets on LT lines

5.4.1

The DF shall maintain reasonable stock of inventory of LT line materials like poles, conductors
etc. for meeting the routine requirement of operation & maintenance and contingencies.

5.5

Adhering to Supply Schedule

5.5.1

The DF shall strictly adhere to the planned load shedding schedule of CESU when circumstances
warrant based on schedules fixed by SLDC from time to time.

5.6

Duties and Responsibilities

The duties and responsibilities shall include, in addition to discharge of duties as mentioned in
the Article 5.1, but not limited to, the following activities:

5.6.1

Load Forecast
The Distribution Franchisee shall carry out demand estimation/ load forecast periodically and
submits the same to CESU in prescribed format.

5.6.2

Operation, Repair & Maintenance and Up gradation

Distribution Franchisee shall be responsible for undertaking operations and maintenance
related activities after the secondary side of the distribution transformers till the metering
point of the LT Consumers in the Franchise Area. The Distribution Franchisee shall also ensure
proper metering of HT Consumers.

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5.7

Compliance with standards / Laws

The Distribution Franchisee shall be responsible for complying with all Indian Electricity Rules,
OERC Standards, Regulations and other Directives as issued and modified from time to time
and as applicable to any distribution licensee. Any penalty imposed by OERC or any other
Government Authority on account of failure of the Distribution Franchisee in compliance shall
be borne by the Distribution Franchisee. The Distribution Franchisee shall abide by and follow
the directives and/ or regulations provided in Electricity Act 2003, Supply Code and CEA
Regulations, amended from time to time on the matter.

5.7.1

Distribution Franchisee shall strictly abide by all norms and safety measures as prescribed in
the Electricity Laws.

5.8

Consumer Service
The Distribution Franchisee shall abide by and follow the directives and/ or regulations
provided in Electricity Act 2003, Supply Code, CEA regulations and OERC regulations amended
from time to time.

6.

DUTIES AND RESPONSIBILITY OF CESU

The broad duties and responsibilities of CESU shall include the following activities:

6.1.1

CESU shall supply the power at Input Points so long it is available from GRIDCO / OPTCL system
to the Franchise Area.

6.1.2

CESU shall carry out capital expenditure in line with the Capex plan specified under Article
2.1.7 and Capex plan finalized as per Article 2.2.3 based on GoOs / State Steering or
Monitoring Committee s guidelines issued from time to time .

6.1.3

CESU shall make timely payments to the DF as per the terms and conditions of this Agreement.

6.1.4

CESU shall be responsible for undertaking the operation and maintenance activities starting
from DTRs towards the upstream which includes all 11KV, 33KV lines, network elements, and
33/11 KV substations. Further, CESU shall also be responsible for replacement of defective
/burnt Distribution Transformers and installation of new DTRs if required.

6.1.5

CESU at the request of the DF shall pursue with the relevant agencies for the augmentation of
EHV line and transformer capacity for Franchise Area wherever needed.

6.1.6

CESU shall mark or send a copy of the Directives received by it under applicable laws,
Regulations and Directives of OERC, which are not in the public domain to the DF.

6.1.7

CESU shall maintain at the Division level stock of material for DTR (4% of available DTR) and
above including material pertaining to HT Lines, Distribution Transformers of various capacities,
to facilitate quick restoration of power supply in any eventuality.

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7.

METERING AND MEASUREMENT

CESU and the DF shall follow CEA Regulations for meters including Smart Meters, check meters,
metering system, inspection and testing of meters, and maintenance of meters.
Directives/order/ clarification issued by OERC from time to time in this regard will also be
followed by both the parties.

8.

INVOICE, PAYMENT AND REMITTANCES

8.1

Invoice, Payment and Collection

8.1.1

Information regarding the consumer billing and collection shall be maintained by the DF
through a software program in such a manner that all the details (mentioned below under
Article 8.1.2) are captured on a daily basis and passed on to CESU along with the collection
details on real time basis.
These daily information shall be submitted to the following CESU officials:
Sub-Divisional Officer, Executive Engineer, Superintending Engineer of the Franchisee Area,
Head of Finance, HR, Operations, MIS, IT & Commerce branch of CESU Head Quarter.

8.1.2

DF shall maintain all the billing & collection of all the consumers in the franchise area.
The DF shall maintain separate details for each month for
EC = TC - MRDF MRCE SCC Misc Income DF Misc Income CESU - SD - ED Tax+ SD adjusted
against EC + Interest on SD of live consumers adjusted against EC + CESUs own consumption
Where
EC = Energy Charge in rupees
TC = Total Collection inclusive of all Arrears in rupees Less unrealized cheques & demand draft
Less collection against Special Arrear as per Article 8.1.10
MRDF = Meter Rent Collected for meters installed / replaced by the DF in rupees.
MRCE= Meter Rent Collected for meters installed by CESU in rupees
SCC = Service Connection Charges collected for installations done by the DF in rupees.
Misc Income DF = (as the case may be and as per the work undertaken by DF) Reconnection
Charges + Meter testing fee + Processing Fee + Super vision Charge + Labour Charges
Misc Income CESU = (as the case may be and as per the work undertaken by CESU)
Reconnection Charges + Meter testing fee + Processing Fee + Super vision Charge + Labour
Charges
SD = Security Deposit /Additional Security Deposit (ASD) in rupees
ED = Electricity Duty in rupees
Tax = Other Statutory Taxes collected from the Consumers in rupees
SD adjusted against EC = Security Deposit adjusted against arrear EC for consumers as per
Regulation 22 of Supply Code, shall be treated as deemed collection

Page 17 of 62

CESUs own consumption = EC portion of the revenue billed against energy consumed by
CESUs own offices shall be treated as deemed collection
The DF shall also maintain the Billing details of all of the above individually along with the
following:
IE = Input Energy in Units
EB = Energy Billed in Units
RPU = EC / IE

8.1.3

Monthly Bill or Monthly Invoice raised by the DF

The Monthly Bill amount that shall be payable by CESU to the DF shall be computed based on
the details as below:
MI (Monthly Invoice / Monthly Bill) = [(RPU Current Month - RPU Base Year) *IE Current Month * (1-X %)] +
MRDF Current Month + SCC Current Month + Misc Income DF Current Month
Where
RPU Current Month = EC Current Month / IE Current Month
RPU Base Year = EC Base Year (Duly adjusted in case of each revision of retail supply tariff in every
FY)/ IE Base Year
EC Base Year shall be calculated by taking into account change in tariff for the various categories of
consumers in current Financial Year and Consumption for Base Year multiplying the same with
the Collection Efficiency in the Base Year.
RPU Base Year will be calculated based on the tariff change as approved by OERC on the 1st day of
the current Financial Year or any day specified by OERC. The base line RPU for the division is as
per Annexure 20.2
Current Month = Month for which the payment has to be made by CESU to Distribution
Franchisee
X% = Percentage Revenue share for the Contract Year as offered to CESU and given in Annexure
20.10.
Please refer to the Annexure 20.3 illustrating the calculation of RPU.

8.1.4

First Month Claim - The First claim submitted by the DF on CESU shall be at the end of the first
month of operation and shall be computed as per Article 8.1.3. 100% of the first claim shall be
paid to DF on the 4th day of the succeeding month.

8.1.5

From the second month onwards, on 4th day of the month CESU shall make total payment due
after reconciliation to the DF for the preceding months due, calculated on cumulative basis in
each FY.

8.1.6

Provisional weekly installment payment will be made on 7th, 14th, 21st, 28th day of the month
for the dues to the DF in that month; which will be reconciled on 4th of the following month.
E.g.: If the total amount due to the DF in the month of July presuming it to be the first month of
the contract is Rs 1,00,000/- then CESU will make the full payment of Rs.1,00,000/- on 4th day
of the succeeding month i.e. in the month of August. During month of August on 7th, 14th,
Page 18 of 62

21st, and 28th day CESU shall pay 20% of the dues of the previous month amounting to
Rs.20,000/-. Full payment of the balance dues, if any, will be paid after reconciliation on 4th of
September the succeeding month. This procedure will form the basis of payments for the
succeeding months during the subsistence of the Agreement.
8.1.7

Regarding adhoc payment to DF, CESU will issue necessary instruction to the concerned Bank
on 5th day of the succeeding month for release of weekly installment on 7th, 14th, 21st & 28th
day of the month as per the stipulations mentioned in para 8.1.6 above.

8.1.8

The DF shall submit its monthly claim on 1st day of succeeding month to CESU for reconciliation
of payments provisionally made.

8.1.9

The Interest on security deposits of Consumers that is adjusted towards dues of the Consumers
in their bills shall be credited by CESU in full towards collection done by the DF in the same
calendar month.

8.1.10

Collection from October 2012 to March 2013, against Special Arrear billed to single phase
domestic consumers for FY 2011-12 as per the order of Honble High Court dated 30 March
2012 shall be considered as collection against Special Arrear and it shall be remitted in full to
CESU. Any default on the part of the consumer in any month but realized subsequently shall be
considered as normal arrear. From April 1, 2013 Collection against Special Arrear in any month
shall be treated as part of normal arrear and shall be considered for RPU calculation for that
month.

8.1.11

The amount paid by the consumer shall be first adjusted towards Electricity Duty provided that
in case of part payment by the consumer, the proportionate share of the Duty from the total
collection shall be adjusted first. Out of the balance, adjustments shall be made in the following
order of priority:
a) Current Electricity Charges
b) Current Miscellaneous Charges
c) (i) Arrear as per Article 8.1.10 (applicable till March 2013)
(ii) Arrear Electricity charges excluding above
d) Arrear Miscellaneous Charges
e) Delayed Payment Surcharge

8.2

Payment to CESU
The DF shall make payment to CESU in the following manner:

8.2.1

The DF shall deposit all the collections on daily basis in the designated account of CESU within 48
hours of such collection from urban area and within 72 hours of such collection from rural area. In
case of a public holidays or banking holidays the money should be deposited on the next working
day. The Franchisee shall open a collection account which shall be non-drawl and no-lien account; in
its own name in the same bank and branch in which the escrow account of CESU is operated. The
Franchisee shall first deposit all the collection to this account and provide an irrevocable instruction
Page 19 of 62

to the bank to transfer all amount deposited in the said account till the previous day to the CESU
account.

8.2.2

Bank transfers, NEFT, RTGS & other such electronic transfers shall be in the CESUs account. All
the cheques and demand draft shall be drawn in favour of CESU.

8.2.3

In case of a shortfall or default in the remittance by the DF against the obligation as per Article
8.2.1, CESU may recover such amount by invocation of BG given for Payment Security Deposit by
the DF after issuing a 2 days notice to the DF. The DF has to restore the BG with its original amount
within 2 working days after invocation of BG by CESU.

8.2.4

If the DF is unable to pay the Input Based Revenue portion (calculated as per Article 8.2.6) amount
in any given month, the DF shall remit the amount equal to such shortfall and also payback the
advance payment made by CESU for the month within 7 working days.

8.2.5

The DF shall be responsible for payment of all taxes, duties, and statutory /local levies arising as
a result of commercial transaction under this contract, such as service tax, sales tax etc if
applicable. CESU shall not be responsible for any tax related liabilities.

8.2.6

On a monthly basis CESU shall raise an invoice onto the DF for its Input based Revenue in the
following manner:
Input Based Revenue shall be calculated as: (RPU Base Year * IE Current Month)

8.2.7

The deposits made by the DF as per Article 8.2.1 in CESUs account shall be considered as
advanced payment towards the invoice raised / to be raised by CESU as per Article 8.2.6

9.

SECURITY DEPOSIT AND PERFORMANCE GUARANTEE

9.1

Security Deposit
As provisioned in the Article-2.1.2 of this Agreement, the Distribution Franchisee shall submit
and maintain valid for the duration of this Agreement, a payment Security Deposit to the
satisfaction of CESU in the form of an irrevocable and unconditional Bank Guarantee (BG) as
per Exhibit 21.1 (b) from any nationalized bank or Scheduled bank payable at Bhubaneswar for
an amount equivalent to Seven (7) Days of average revenue collected in the base year.
The Bank Guarantee shall be governed as below:

9.1.1

The Payment Security Deposit Bank Guarantee shall be initially valid for a period of 90 days
over and above from one year from the Effective Date.

9.1.2

Distribution Franchisee shall renew the Payment Security Deposit Bank Guarantee 30 days prior
to its expiry date for a further period of one year and furnish the same to CESU, failing which
CESU shall have the right to invoke the Payment Security Deposit BG after giving a notice of
seven days. A similar renewal shall be done every year during the duration of the DFA.

9.1.3

Within one week of beginning of each quarter, the amount of the BG shall be upgraded, based
on the collection from the Franchise Area with a fresh BG of additional amount. However,
under no circumstances shall the amount of BG revised downwards. The validity of such fresh
BG shall be such as to co-terminate with the validity of the BG submitted under Article 9.1.2.

Page 20 of 62

These BGs shall also be renewed every year for a further period of one year during the duration
of the DFA.
9.1.4

The Payment Security Deposit can also be invoked as per the Article 16.7.2.4 and Article 8.2.3
of this Agreement.

9.2

Performance Guarantee
As provisioned in the Article-2.1.1 of this Agreement, the Distribution Franchisee shall submit
and maintain valid for the duration of this Agreement, a performance guarantee to the
satisfaction of CESU in the form of an irrevocable and unconditional Bank Guarantee as per
Exhibit 21.1 (a) from any nationalized bank or Scheduled bank payable at Bhubaneswar for an
amount equivalent to INR 1 crore per division for first year of Franchise term.
The Bank Guarantee shall be governed as below:

9.2.1

The Performance Guarantee shall be in the format prescribed by CESU initially valid for a period
of 90 days over and above from the one year from the Effective Date.

9.2.2

Distribution Franchisee shall renew the Performance Guarantee within 15 days of completion
of one year and furnish the same to CESU, failing which CESU shall have the right to invoke the
Performance Guarantee. The said renewal shall continue till the duration of the DFA.

9.2.3

CESU has the right to invoke the Performance Guarantee in case of failure to bring down the
AT&C losses as per loss reduction trajectory upto variation of 5% as per the Annexure 20.9 of
the DFA and as per the Article 16;submitted by Distribution Franchisee and approved by CESU.

9.2.4

Distribution Franchisee shall, within two weeks of invocation of the Performance Guarantee by
CESU, submit the fresh performance guarantee to the level prior to invocation as per the terms
and conditions of the DFA.

9.2.5

The Performance Guarantee can also be invoked as per the Article 16 of this Agreement.

10.

HAND HOLDING & DEPUTATION OF CESU EMPLOYEES

10.1

Handholding
CESUs employees shall provide handholding support to the franchisee for the first 3 months
for which CESU shall continue to bear the cost of salary & allowances payable to the CESUs
employees involved therein. On specific request by the DF, Handholding period may be
extended upto six months from the Effective Date.

10.2

Deputation of CESU Employees

The existing employees of CESU in the Franchise Area will be given an option to join the DF on
deputation if requested by the DF, as per Deputation Rules of CESU. Please refer to the Exhibit
21.2 for Deputation Rules of CESU.
After the hand-holding period, CESU will redeploy its employees elsewhere. However, if the DF
requests the services of some of the employees, the option of the same can be extended by
Page 21 of 62

CESU to its employees at its discretion on lien basis or permanent absorption by DF depending
on the decision taken by the DF and the particular employee.

11.

EMPLOYEE(S) ENGAGED BY THE DF

11.1

DFs responsibilities towards employees and indemnifying CESU

11.1.1

The DF shall be responsible for recruitment of employees at its own choice. Under no
circumstances the employee(s) of the DF shall be considered as CESU employee and claim of
remuneration at par with CESU employee(s). The DF shall make it clear to the employee(s)
engaged by him that they are its employee(s) and CESU has nothing to do with employment or
any other claim. Only the persons expressly agreeing to these conditions shall be employed by
the DF. CESU will not be responsible or liable for the claims raised by the employee(s) of the DF
and the DF shall indemnify CESU in respect thereof.

11.1.2

The DF shall indemnify CESU against all claims which may be made under the Minimum Wages
Act, 1948.The Contract Labour (R&A) Act, 1970, Abolition of Child Labour Act, 1986, Provident
Fund Act, 1952, ESI Act, 1948, Payment of Wages Act, 1936 or any statutory modification
thereof or Rules there under or otherwise for in respect of any damage or compensation
arising in consequence of any dispute under these Act.

11.1.3

The DF shall indemnify CESU against all claims under the Workmen Compensation Act, 1923 or
any statutory modification thereof or rules there under or otherwise for in respect of any
damage or compensation payable in consequence of any accident or injury sustained by any
workman engaged in the performance of the business relating to this Distribution Franchisee
Agreement. In case of personal injury to workmen employed by the DF on the works for which
the DF is liable to pay the compensation under the Workmen Compensation Act.

11.1.4

The DF should follow all statutory Rules, Acts and Regulations that are relevant and necessary
for carrying out the work.

12.

REPORTING AND AUDIT

12.1

Reporting
The DF shall furnish to CESU the following information as per schedule stated therein:

12.1.1

The DF shall be required to update the asset register and submit the same to CESU on a
quarterly basis.

12.1.2

The DF shall generate periodic Management Information System (MIS) and Monitoring Reports
as required by CESU and OERC in the prescribed format and communicate them to CESU
through email.

12.1.3

The DF shall facilitate CESU for filing of ARR petition by providing data with respect to the
Franchise Area as per format provided by OERC. The requisite data shall be made available
latest by 1st week of October having updated data till end of September for that year.

12.1.4

The DF shall provide online access to its system to the designated CESU officials.
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12.1.5

All correspondence, records, reports, presentations and other forms of information developed
by the DF whether electronic or physical, and required by the Licensee to continue operations,
shall become the property of CESU upon Expiry/ termination of the Agreement subject to
applicable permissions. CESU reserves, without limitation, the right to adopt procedures, forms
and productivity enhancement methods developed under this Agreement, elsewhere.
Notwithstanding the above, the DF shall have the right to retain copies of information, reports,
correspondence, presentations mentioned above.

12.1.6

The DF shall notify CESU, at the earliest possible time, of any Major Incident that has occurred
with details affecting any part of the Distribution System.

12.2

Audit

12.2.1

The DF within the Franchisee Area shall submit detailed audited reports for inventory and
assets on an annual basis subject to verification by CESU.

12.2.2

The DF shall carry out annual audit of the billing data including the system and database and
consumer service centres operated within the scope of the Franchise Area subject to
verification by CESU.

12.2.3

All the aforesaid audits/verifications shall be conducted by a third party auditor mutually
agreed to by CESU and DF. Both, CESU and the DF shall equally bear the cost of such audits.

12.2.4

CESU may, at any time during the subsistence of this agreement, inspect, verify and audit the
required data and records for the purpose of verifying information received under this
contract, and the DF shall be obliged to extend all cooperation, assistance and facilities, as may
be required.

12.2.5

The DF shall comply with all reporting formats and data requirements prescribed.

13.

INDEMNIFICATION

13.1

Indemnity

13.1.1

The DF during the term of this Agreement shall indemnify, defend and hold CESU harmless
against:

13.1.1.1

Any acts of omissions/commission of the DF with regard to the electricity distribution services.
In such event the DF shall have no claim for compensation, incentive or any other claim against
CESU.

13.1.1.2

Claims against CESU made by any third party for any act of commission or omission by the DF,
the DF shall indemnify and hold CESU harmless and compensate all the losses so caused to
CESU. CESU shall also be entitled to defend any action with third parties at the cost and
expenses of the DF.

13.1.1.3

All monetary obligations or losses or implications arising out of such action / inaction of
Distribution Franchisee in the nature of costs, expenses or damages. CESU shall have no liability
in respect of loss of profit, loss of income, loss of agreement or any other losses or damages
suffered or arising out of or in connection with existence of any defects whether latent or
Page 23 of 62

apparent in electricity network and the obligation of Distribution Franchisee to provide support
services shall remain unaffected thereby.
13.1.1.4

Non-payment of all taxes, duties, and statutory /local levies arising as a result of this
commercial transaction as required under Article 8.2.4

13.1.1.5

Non-compliance of the Laws, Regulations, Orders and Directives of OERC by the Distribution
Franchisee.

13.1.1.6

Any penalty imposed on account of non-compliance as stated hereinabove.

13.1.1.7

This Indemnification shall survive the term of this Agreement.

13.1.2

CESU shall indemnify, defend and hold the Distribution Franchisee harmless against:

13.1.2.1

Acts of commission or omission in the Franchise Area by CESU till the end of 3 months after the
Effective Date of this agreement. However, such indemnity shall be limited only to legally
established claims.

13.2

Procedure for claiming indemnity

13.2.1

Third party claims

13.2.1.1

Where either party is entitled to indemnification from the other party pursuant to Article13.1,
it shall promptly notify the other party of such claim, proceeding, action or suit referred to in
Article 13.1 in respect of which it is entitled to be indemnified. Such notice shall be given as
soon as reasonably practicable after the Indemnified party becomes aware of such claim,
proceeding, action or suit. The indemnifying party shall be liable to settle the indemnification
claim within thirty [30] days] of receipt of the above notice. Provided however that, if:
(i)

The Parties choose to contest, defend or litigate such claim, action, suit or
proceedings in accordance with Article 13.1 below; and

(ii)

the claim amount is not required to be paid/deposited to such third party pending
the resolution of the dispute,

The indemnifying party shall become liable to pay the claim amount to indemnified party or to
the third party, as the case may be, promptly following the resolution of the dispute, if such
dispute is not settled in favour of the indemnifying party.
13.2.1.2

The indemnified Party may in consultation with the Indemnifying Party, contest, defend and
litigate a claim, action, suit or proceeding for which it is entitled to be indemnified under Article
13.1 and the indemnifying Party shall reimburse to the indemnified Party all reasonable costs
and expenses incurred in this respect.. However, the indemnified Party shall not settle or
compromise such claim, action, suit or proceedings without first getting the consent of the
indemnifying Party, which consent shall not be unreasonably withheld or delayed.
The indemnifying Party may, at its own expense, assume control of the defence of any
proceedings brought against the indemnified Party, if it acknowledges its obligation to
indemnify, gives prompt notice of its intention to assume control of the defence, and employs
an independent legal counsel at its own cost.
Page 24 of 62

13.3

Indemnifiable Losses
Where either party is entitled to Indemnifiable Losses from the indemnifying party pursuant to
Article 13.1, it shall promptly notify the indemnifying party of the Indemnifiable Losses. The
indemnifying party shall pay the Indemnifiable Losses within [30] thirty days of receipt of the
notice seeking Indemnifiable Losses by indemnified party. It is expressly agreed herein that the
Indemnifiable losses of either party shall be restricted to costs and expenses for all claims
except for the Indemnifiable losses for third party claims, wherein consequential damages shall
also be included, if applicable.

14.

INSURANCE
The DF at its own discretion shall insure, obtain and keep in effect all Insurances required under
laws of India for the assets installed / commissioned during the term of this Agreement.

15.

NON-DISPOSAL OF SHARES AND CHANGE IN MANAGEMENT

15.1

Non Disposal of Ownership

The parent companies and / or Promoters of the Distribution Franchisee shall give an
Undertaking to CESU for Non-disposal of shares / stake equal to or greater than 49%. During
the operation of this Agreement there shall be no change in management / ownership except
as above.

15.2

Change in Management
The Distribution Franchisee shall not effect any change in the management responsible for its
operations under this Agreement without prior approval of CESU.
In case any Expert / Management Personnel is to be replaced, prior intimation is to be given to
CESU. The Expert / Management Personnel shall be substituted with a similar or better
qualified Expert failing which CESU will have the right to impose a penalty / declare event of
default. In case of difference of opinion on the suitability of the substituted expert, CESU shall
discuss with the DF on why it considers such substituted persons as not suitable and provide
reasonable opportunity to the DF to recruit an alternate person before resorting to its right
under this Article.

16.

EVENT OF DEFAULT AND TERMINATION

16.1

Monitoring and reviewing the performance of DF

16.1.1

CESU will monitor the performance of DF on various operational parameters on Billing,

Collection and Remittance as per Article 8, AT&C Loss trajectory in view of Annexure 20.9,
Page 25 of 62

Work Plans in view of Annexure 20.6, Annexure 20.7 and Annexure 20.8 and Consumer Service
as per OERC guideline as well as the terms of this agreement once in a quarter.
16.1.2

DF will be communicated on the deficiency in service, if any from time to time. They are
required to comply the same immediately.

16.2

Distribution Franchisee Event of Default

The occurrence and continuation of any of the following events, unless any such event occurs
as a result of a Force Majeure event or a breach by CESU of its substantial obligations under
this Agreement, shall constitute a Distribution Franchisee event of default.

16.2.1

Payment / Collection Transfer Default

Payment Default or Collection Transfer Default by the DF shall mean failure or refusal by the DF
to perform its following obligations under the Agreement:

16.2.1.1

Failure on account of the DF to make payment / transfer the collection as per Article - 8.2.1 of
this Agreement;

16.2.1.2

Failure on account of the DF to make payment as per Article - 8.2.4 of this Agreement;

16.2.1.3

The DF shall eliminate such Event of Default and mitigate consequences of such Event of
Default within a period of 2 working days;

16.2.2

Critical Events of Default are:

16.2.2.1

Failure to maintain Performance Guarantee and Security Deposit as per Article -9 of this
agreement;

16.2.2.2

Failure to carry out meter reading activities and bill consumers for a period of more than 1
month;

16.2.2.3

Failure to maintain a RPU greater than RPU Base Year for two consecutive quarters;

16.2.2.4

Failure to submit in time the Information Report as provided by CESU;

16.2.2.5

The DF shall eliminate such Event of Default and mitigate consequences of such Event of
Default within a period 15 days for Event of Default cited at 16.2.2;

16.2.3

Other Critical Events of defaults are:

16.2.3.1

Failure to achieve 10% AT&C loss reduction in the first year of operation;

16.2.3.2

Failure to achieve 5% less than committed cumulative AT&C loss reduction trajectory
consecutively for two (2) years as defined in Annexure 20.9;

16.2.3.3

Failure to invest up to 90% of cumulative expenditure for two (2) years as defined in Work
Plans given at Annexure 20.6 and Annexure 20.7;

16.2.3.4

The DF has engaged in a corrupt practice or/and fraudulent practice in competing for executing
the contract.

16.2.3.5

A resolution for winding up has been passed by the majority shareholders of the DF.

16.2.3.6

The DF is declared insolvent or bankrupt.

Page 26 of 62

16.2.3.7

The DF has unlawfully repudiated this Agreement or has otherwise expressed an intention not
to be bound by this agreement.

16.2.3.8

Any representation or warranty made by the DF during the term of the agreement is found to
be false and misleading.

16.2.3.9

Sale of Input energy in the Franchise Area to any party outside the Franchise Area.

16.2.3.10

Failure to comply with Article 15;

16.2.3.11

Failure to comply with non-critical events of default within the specified period as per Article
16.2.4.

16.2.3.12

The DF shall eliminate such Event of Default and mitigate consequences of such Event of
Default within a period 30 days for Event of Default cited at 16.2.3.

16.2.4

Non-critical Event of Default

Non-critical Event of Default by the DF shall mean failure or refusal by the DF to perform the
following obligations under the Agreement:

16.2.4.1

Failure to submit periodic performance report (comprising Billing and Collection report,) to
CESU after Effective Date;

16.2.4.2

Reporting inconsistencies in energy/ revenue accounting, if observed during periodic/

unscheduled inspection;

16.2.4.3

Failure to comply with any terms and conditions, as applicable under this Agreement for a
consecutive period of thirty (30) days;

16.2.4.4

Persistent non-compliance of Standards of Performance laid-down by OERC after the first

Contract Year. Persistent would mean non-compliance of any of terms of Standards of
Performance in all similar cases for a continuous period of three months;

16.2.4.5

Persistent non-compliance of OERCs Electricity Supply Code and Other Conditions of Supply
as approved and modified from time to time after the first Contract Year. Persistent would
mean repeated non-compliance of any of terms of Supply Code and Other Conditions of Supply
for a continuous period of three months;

16.2.4.6

The DF shall eliminate such Event of Default and mitigate consequences of such Event of
Default within a period of 60 days at 16.2.4.
If any of the above is in default for a period of more than 60 days, it shall become a Critical
Event of Default as per Article 16.2.3.11.

16.3

CESU Event of Default

The occurrence and continuation of any of the following events, unless any such event occurs
as a result of a Force Majeure Event or a breach by Distribution Franchisee of its substantial
obligations under this Agreement, shall constitute a CESU Event of Default:

16.3.1

Critical Event of Default

16.3.1.1

Failure on account of CESU to make payments as per Article 8.1.4, 8.1.5 and 8.1.6 of this
Agreement;
Page 27 of 62

16.3.1.2

The CESU shall eliminate such Event of Default and mitigate consequences of such Event of
Default within a period of 15 days.

16.3.2

Non-Critical Event of Default

16.3.2.1

Breach of any other material terms and conditions, as applicable under this Agreement for a
consecutive period of thirty (30) days. If the default continues for a period of more than 60
days, it shall become a Critical Event of Default;

16.3.2.2

The CESU shall eliminate such Event of Default and mitigate consequences of such Event of
Default within 60 days.

16.4

Termination Procedure for Event of Default by the DF

16.4.1

On the occurrence of Event of Default by the DF, CESU shall issue an Event of Default notice to
the DF.

16.4.2

In case the DF is unable to eliminate/ mitigate the consequences of Event of Default within the
period stipulated at 16.2.2.5 and 16.2.3.12 a preliminary notice of termination may be served
by CESU to the DF, elaborating the event of default by the DF. For Article 16.2.1 a final
termination notice may be served directly.

16.4.3

If the default is not cured within a period of thirty days from the date of issue of the
preliminary notice of termination as provided in Article 16.4.2, this Agreement may be
terminated after serving the final termination notice to the DF.

16.4.4

It is expressly agreed that both the parties shall continue to perform their respective
obligations until the serving of final termination notice, whereupon this Agreement shall
terminate on date of such notice served to the DF.

16.4.5

CESU shall exercise its Step-in rights after serving the final termination notice. The DF shall be
obliged to extend transition assistance for a period of 30 days from the serving of such final
termination notice, failing which the costs and expenses incurred by CESU on the account of
non-provision of such assistance by the DF shall be recovered from the Termination payment of
the DF.

16.5

Termination Procedure for Event of Default by CESU

16.5.1

On the occurrence of Event of Default by CESU, the DF shall issue an Event of Default notice to
CESU.

16.5.2

In case CESU is unable to eliminate/ mitigate the consequences of Event of Default within the
period stipulated in Article 16.3.1.2 and Article 16.3.2.2, a preliminary notice of termination
may be served by the DF to CESU, elaborating the Event of Default by CESU.

16.5.3

If the default is not cured within a period of thirty days from the date of serving of preliminary
termination notice as provided in Article 16.5.2, or if suitable explanation for the inability to
cure the default in question within the stipulated time is not submitted, this Agreement may be
terminated after serving the final termination notice to CESU.

Page 28 of 62

16.5.4

It is expressly agreed that both the parties shall continue to perform their respective
obligations until the serving of final termination notice, whereupon this Agreement shall
terminate on date of serving such notice to CESU.

16.5.5

CESU shall exercise its Step-in rights after receiving the final termination notice. The DF shall be
obliged to extend transition assistance for a period of 30 days from the serving of such Final
termination notice, failing which the costs and expenses incurred by CESU on the account of
non-provision of such assistance by the DF shall be recovered from the Termination payment of
the DF.

16.6

Consequences of Termination

16.6.1

Consequences of Termination for the DFs Event of Default

16.6.1.1

Without prejudice to the other rights of CESU in case of termination, the DF shall pay all the
dues payable to CESU on the date of termination. The DF shall pay dues to third parties only
after the payment of all CESU dues. However statutory obligations such as Provident Fund
payment, Tax related payments will have first priority.

16.6.1.2

CESU has right to make good any shortfall from the performance guarantee by invoking the BG.

16.6.1.3

CESU unconditionally reserves the right to claim from the DF any costs, expenses or loss that it
may have incurred by reason of breach of failure on the part of the DF to observe and perform
any of the terms and conditions of the agreement

16.6.1.4

On termination of this Agreement however occasioned, the DF shall forth with deliver to CESU
all relevant papers including the forms used, partially used and unused receipts books, all
promotional materials and documents which may have come into its possession or custody
under the terms of this Agreement or otherwise.

16.6.2

Consequences of Termination for CESUs Event of Default

16.6.2.1

Without prejudice to the other rights of the DF in case of termination, CESU shall pay all the
dues payable to the DF which is due on the date of termination as per Article 16.9.

16.7

Step in Rights of CESU

16.7.1

Step In Rights in case of Event of Default after serving of Final Termination Notice

16.7.1.1

CESU or its Designate(s) shall be entitled to immediately enter any and/ or all of the Site(s) and
operate the Distribution System and collect revenues due from Consumers.

16.7.1.2

CESU shall have the right to invoke the Performance Guarantee furnished by Distribution
Franchisee as well as Bank Guarantee against the Payment Security Deposit and to recover all
its dues and outstanding amounts.

16.7.1.3

All Distribution Assets of the DF in the Franchise Area shall stand transferred to CESU

16.7.2

Step In Rights in the Event of Abandonment by Distribution Franchisee

16.7.2.1

CESU or its Designate(s) shall be entitled to immediately enter any and/or all of the Site(s) and
operate the Distribution System.
Page 29 of 62

16.7.2.2

CESU shall have a right to terminate the Agreement.

16.7.2.3

CESU shall issue a take-over notice to the Agreement Representative and serving of such notice
shall be treated as a deemed takeover of operations by CESU.

16.7.2.4

CESU shall have the right to invoke the Performance Guarantee furnished by Distribution
Franchisee as well as Bank Guarantee against the Payment Security Deposit and to recover all
its dues and outstanding amounts.

16.7.2.5

All Distribution Assets of the DF in the Franchise Area shall stand transferred to CESU.

16.7.2.6

However, the liability of meeting the repayment obligations on account of financing

arrangements for such assets shall lie with the DF.

16.8

Mode of Payment on Expiry

The payment on expiry of the DF agreement shall consist of the following:

16.8.1

Additional Revenue collected against billing of last month of Franchisee Operation Period
worked out as per Article 8.

16.8.2

All the payments including un-utilized BG shall be released after deductions on account of any
outstanding amount towards CESU, if any.

16.8.3

Unrecovered meter rent if any in the Franchise Area

16.9

Mode of Termination Payment in case of CESU Event of Default

The Termination payment to the DF shall consist of the following:

16.9.1

Un-recovered meter rent if any in the Franchise Area.

16.9.2

Due Payments for Franchisee Operation Period worked out as per Article 8.

16.9.3

Depreciated value of all Distribution Franchisee Assets in the Franchise Area calculated in
accordance to the depreciation rates published by OERC.

16.9.4

An amount equal to 70% of dues worked out described as above shall be released to the DF not
later than 30 days from the Termination Date.

16.9.5

The balance 30% of dues shall be released on completion of physical verification and auditing
but not later than 60 days from Termination Date.

16.9.6

All the above payments including un-utilized BG shall be released after deductions on account
of any outstanding amount towards CESU, if any.

16.10

Mode of Termination Payment in case of Event of Default of Distribution Franchisee

The Termination payment to the DF shall consist of the following:

16.10.1

Un-recovered meter rent if any in the Franchise Area.

16.10.2

An amount equal to 70% of dues worked out described as above shall be released to the DF not
later than 7 days from the Termination Date.
Page 30 of 62

16.10.3

The balance 30% of dues shall be released on completion of physical verification and auditing
but not later than 30 days from Termination Date.

16.10.4

All the above payments including un-utilized BG shall be released after deductions on account
of any outstanding amount towards CESU, if any.

17.

GOVERNING LAW AND DISPUTE RESOLUTION

17.1

Governing Law

17.1.1

This Agreement has been executed and delivered in India and its interpretations, validity and
performance shall be construed and enforced in accordance with the laws of India and also the
laws applicable to the State of Odisha.

17.1.2

Any dispute arising out of compliance/ non-compliance of this Agreement shall be exclusively
under the jurisdiction of court at Bhubaneswar and the High Court of Orissa at Cuttack.

17.1.3

Disputes between the consumers in the Franchise Area and CESU shall be referred to the
existing relevant Consumer Grievance Redressal Forums.

17.2

Amicable Settlement

17.2.1

Either Party shall be entitled to raise any dispute or differences of whatever nature arising
under, out of or in connection with this Agreement including its existence or validity by giving a
written notice to the other Party, which shall contain:
(i) The details of the Dispute;
(ii) The grounds for such Dispute; and
(iii) All documentary evidence in support of its claim.
The other Party shall, within thirty (30) days of receipt of dispute notice issued under Article
17.2.1, furnish:
(i) Counter-claim and defences if any regarding the Dispute; and
(ii) All documentary evidence in support of its defences and counter-claim.

17.2.2

Both the parties shall constitute a Permanent Dispute Resolution Body having equal
representation from each of the parties. The disputes or differences arising under this
Agreement shall be referred for resolution to this body, which shall communicate its decision
within Thirty (30) days. Engineer-in-Charge of the Electrical Circle and Project Head (or
Engineer-in-Charge by whatever name called) of the Distribution Franchisee shall be part of this
Permanent Dispute Resolution Body.

17.2.3

In case of non-settlement of dispute by the Engineer in - Charge and Project Head of the
Distribution Franchisee, such dispute or differences shall be referred for decision to a body
constituted of CEO, CESU and Head, Distribution Franchisee (by whatever name called) which
shall communicate its decision within a period of 15(fifteen) days.

17.2.4

Dispute remains still unresolved either party may approach the OERC. The Parties agree that
the award of OERC shall be final and binding upon the Parties.
Page 31 of 62

17.2.5

The language of the submission to OERC shall be English.

17.2.6

Both the parties shall continue to perform their respective obligations during the conduct of
the Dispute Settlement Procedure.

17.3

Disputed Payments

17.3.1

A claim submitted by the DF in terms of Article-8 can be disputed by CESU; however, CESU shall
remit the payment against the same to the DF within the stipulated time which CESU deems fit.

17.3.2

In case the dispute is resolved in the favour of the DF, CESU shall within 7 days of settlement of
such dispute pay the additional amount.

17.3.3

The information submitted by the DF and forming a basis for the claim can also be disputed by
CESU.

17.3.4

In case the dispute is resolved in the favour of CESU, the DF shall within 7 days of settlement of
such dispute refund the excess amount.

17.4

Severability
If any section, provision or Article of this Agreement is held by a court of competent jurisdiction
to be invalid or unenforceable, or is pre-empted by central or state laws, regulations or
regulatory agencies, the remainder of this Agreement shall not be affected, except as is
otherwise provided in this Agreement. However if the implication of such a situation is
significant, both the parties may mutually decide the future course of action.

18.

FORCE MAJEURE

18.1.1

No Party shall be liable to the other Parties if, and to the extent, that the performance or delay
in performance of any of its obligations under this Agreement is prevented, restricted, delayed
or interfered with due to occurrence of any event of force Majeure including acts of God, acts
of any Government (de jure or de facto) or regulatory body or public enemy, war, riots,
embargoes, industry-wide strikes, the reduction in supply due to outage of generation facilities
/ transmission lines or any other causes, circumstances, or contingencies, whether of a similar
or dissimilar nature to the foregoing, beyond the parties control, which cannot be reasonably
forecast or prevented, thereby, hindering the performance by the parties of any of their
obligations hereunder. The Party claiming an event of force majeure shall promptly notify the
other Parties in writing, and provide full particulars of the cause or event and the date of first
occurrence thereof as soon as possible after the event and also keep the other Parties
informed of any further developments. The Party so affected shall use its best efforts to
remove the cause of non-performance, and the Parties shall resume performance hereunder
with the utmost dispatch when such cause is removed. For the purpose of clarity, the Parties
agree that the failure of a Party to adhere to any statutory or regulatory requirement or to
obtain necessary approvals shall not be deemed to be a force majeure situation.

Page 32 of 62

18.1.2

A condition of force majeure shall not relieve any Party of any obligation due under this
Agreement prior to the event of force majeure.

19.

MISCELLANEOUS PROVISIONS

19.1

Monitoring Committee
A monitoring committee consisting of some of the members of State Advisory Council along
with CESU officials may visit the franchise area to obtain first-hand information about the
operation of the agreement. The recommendations of the committee will have to be given due
weightage while implementation of this agreement.

19.2

Merger / Acquisition / Amalgamation of the DF

In the event the Distribution Franchisee undergoes merger/ acquisition/ amalgamation, it will
duly seek prior approval from CESU for assignment of this agreement to the new entity. CESU
shall have the right to terminate the agreement in such a scenario.

19.3

Language of Communication
The language of communication between two parties shall be English only.

19.4

Notices
All notices must be delivered personally, by registered or certified mail or by facsimile
transmission to the address given below:

For CESU:
Engineer In Charge:
Superintendent Engineer
Electrical Circle-II, Bhubaneswar
Plot No. MIG- 95 & 96, Baramunda Housing Board Colony
Behind Andhra Bank,Bhubaneswar-751003
Phone: 0674-2354775
Fax: 0674-2354775
E-Mail: sebbsr2@cescoorissa.com
Agreement Representative:
Chief Commercial Officer
CESU, 2nd Floor, IDCO Towers, Janpath, Bhubaneswar - 751022
Phone: 0674-2545677
Fax: 0674-2543125
E-Mail: ccocesco@cescoorissa.com
Page 33 of 62

For Distribution Franchisee:

Engineer-in-charge:
Abhishek Yadav
Chief Executive Officer
Feedback Energy Distribution Company Pvt. Ltd.
4th Floor, A-I, Fortune Towers, Chandrasekharpur
Bhubaneswar-751023
Mob No. 7894300600

Phone/Fax No.: 0674-2301641

E-Mail: abhishek.yadav@feedbackinfra.com

Agreement Representative:
Naveen Kapoor
Executive Director-Corporate Affairs
Feedback Energy Distribution Company Pvt. Ltd.
4th Floor, A-I, Fortune Towers, Chandrasekharpur
Bhubaneswar-751023
Mob No. 7894357777

Phone/Fax No.: 0674-2301641

E-Mail: naveen.kapoor@feedbackinfra.com

All notices shall be effective: (i) if sent by facsimile transmission, when sent (on receipt of confirmation of
the correct number or address); (ii) if sent by registered post or certified mail, within 5 days of dispatch;
and (iii) if delivered personally, on receipt by intended recipient. Provided that all notices given by facsimile
transmission shall be confirmed by registered or certified mail. Each party shall forthwith notify the other
party of any change in its address to which notices under this Agreement are to be delivered, mailed or
facsimiled.

19.5

Amendment:
Any changes, modifications or amendments carried out during the execution of the agreement
shall be considered part of this agreement, provided the same are agreed in writing by both the
parties.

19.6

Non-Waiver
The failure in any one or more instances of a Party to insist upon performance of any of the
terms, covenants or conditions of this Agreement, to exercise any right or privilege in this
Agreement conferred or the waiver by said party of any breach of any of the terms, covenants
or conditions of this Agreement shall not be construed as a subsequent waiver of any such
terms, covenants, conditions, rights or privileges, but the same shall continue and remain in full
force and effect.
Page 34 of 62

19.7

Binding Effect
This Agreement and the covenants, terms and conditions set forth herein shall be binding upon
and shall inure to the benefit of the Parties hereto and their respective successors and
permitted assigns.

Annexure attached hereto form part of the Agreement.

CESU and the Distribution Franchisee hereby represent and warranty that:
They are not prevented under the applicable Laws and Regulations to enter into this Agreement;
They have obtained the required authorizations/ permits to sign this Agreement.
IN WITNESS WHEREOF the Parties have executed these presents through their authorized representatives
at
[Bhubaneswar].
For and on behalf of

For and on behalf

M/s Central Electricity Supply Utility of Odisha

M/s Feedback Energy Distribution Company

Private Ltd

(Nilambar Jena)

(Naveen Kapoor)

Chief Commercial Officer

Executive Director Corporate Affairs

Signature with seal

Signature with seal

Witness:

Witness:

1.

1.

2.

2.

Page 35 of 62

20.
20.1

Annexures
Brief description of Base Line Asset As on 1st April, 2012

IMPORT AND EXPORT POINTS AT 33KV & 11KV

OF KHURDA ELECTICAL DIVISION , KHURDA, CESU
IMPORT POINTS

EXPORT POINTS

NAYAGARH KHURDA GRID

33 KV KHRUDA INCOMING-I
33 KV KHURDA INCOMING-II

KED
KHURDA

STATION TRANFORMER , KHURDA GRID

33KV DELANGA FDR TO PURI

inter division point

33 KV KHURDA INCOMING-III

11KV KAKUDIA FDR( TO PURI)

33KV BINODPADA(IDP) FDR

Brief Description of Khurda Electrical Division Area

1
2
3
4
5
6
7
8
9
10

Khurda Electrical Division

No of 33/11 kV Power Transformer No.s
Capacity of 33/11 kV Power Transformer (MVA)
No. of 33 kV Feeders
No. of 11 kV Feeders
LT line overhead ( Bare) in Kms
LT line- AB Cables in Kms
LT Cable Underground in Kms
HT overhead-33kV Line(Kms)
HT overhead-11 kV Line(Kms)
HT underground Cable (Kms)

11

Distribution Transformers No.s and Total MVA

2406 Nos. /158.88

MVA

12

No of Generators feeding at 33kV / 11kV Bus of

Primary Substation

Nil

41
139.18
7
54
1525.7
1762.9
0
260.2
1589.1
0

Page 36 of 62

Category wise consumer details as on 1st April, 12 of Khurda Electrical Division

Tariff Category wise Consumer details as on 1st April, 2012

LT
LT
LT
LT
LT
LT
LT
LT
LT
LT
LT
LT
LT

Connected
No. of
Load in kW
Consumers
7,395
4,486.57
81,456
93,310.55
6,071
6,720.55
387
1,960.84
12
275.49
0
0.00
14
351.28
496
4,924.00
102
3,991.00
417
769.50
124
850.14
283
2,926.00
0
0.00

HT
HT
HT
HT
HT
HT

12
5
3
3
55
371

90.00
74.29
183.00
1,187.00
4,952.00
8,137.11

HT
HT
HT
HT
HT
HT
HT
HT
HT

180
110
58
0
0
0
0
0
0
97,554

9,809.56
969.78
37,217.11
0.00
0.00
0.00
0.00
0.00
0.00
183,185.76

LT
Kutir iyoti (<=30KWH)
Domestic - Others
General Purpose ( <110 KVA)
Irrigation, Pumping & Agriculture
Allied Agricultural Activities
Allied Agro-industrialActivities
Public Lighting
L T.Industrial (S) Supply
L.T.Industrial (M) Supply
Specified Public Purpose
PWW & Sewage Pumping
General Purpose ( => 110 KVA )
Large Industry
HT
Bulk Supply - Domestic
Irrigation
Allied Agricultural Activities
Allied Agro-industrial Activities
Specified Public Purpose
General Purpose
H.T.Industrial (Small and Medium
Industry)
PWW & Sewage Pumping
Large Industry
Power Intensive Industry
Mini Steel Plant
Railway Traction
Emerg. Supply to CPP
Colony Consumption
Special Tariff
Total Consumer

Page 37 of 62

Input Units in MU
Billin Units in MU
Billing in Rs. Lakh
Collection in Rs. Lakh
RPU without revision in Tariff

HT
HT
HT
HT
HT
HT
HT
HT
HT
HT
HT
HT
HT
HT
HT

LT
LT
LT
LT
LT
LT
LT
LT
LT
LT
LT
LT
LT

12
5
3
3
55
371
180
110
58
0
0
0
0
0
0
797
97,554

No. of
Consumer
7,395
81,456
6,071
387
12
0
14
496
102
417
124
283
0
96,757

Base Line RPU

430.0 Billing Efficiency
250.6 Coll Efficiency
11073.60
9855.42
2.29

Kutir iyoti (<=30KWH)

Domestic - Others
General Purpose ( <110 KVA)
Irrigation, Pumping & Agriculture
Allied Agricultural Activities
Allied Agro-industrialActivities
Public Lighting
L T.Industrial (S) Supply
L.T.Industrial (M) Supply
Specified Public Purpose
PWW & Sewage Pumping
General Purpose ( => 110 KVA )
Large Industry
LT Total
HT
Bulk Supply - Domestic
Irrigation
Allied Agricultural Activities
Allied Agro-industrial Activities
Specified Public Purpose
General Purpose
H.T.Industrial (Small and Medium )
PWW & Sewage Pumping
Large Industry
Power Intensive Industry
Mini Steel Plant
Railway Traction
Emerg. Supply to CPP
Colony Consumption
Special Tariff
HT Total
Grand Total

LT

58.28%
89.00%

0.1
0.0
0.5
0.5
6.0
20.9
7.6
2.2
98.9
0.0
0.0
0.0
0.0
0.0
0.0
136.8
408.0

Billing
in MUs
1.0
246.3
8.3
1.3
1.0
0.0
1.2
3.3
2.2
0.8
1.7
4.1
0.0
271.2
2.59
1.21
6.41
15.66
321.19
1,224.31
535.44
136.77
5,485.91
0.00
0.00
0.00
0.00
0.00
0.00
7,729
11,073.60

2.15
0.49
5.35
38.07
307.37
1,179.00
490.69
100.27
5,118.16
0.00
0.00
0.00
0.00
0.00
0.00
7,241.56
9,966.09

Billing
Collection
in Rs Lacs
in Rs Lacs
12.42
20.69
2,059.45
1,677.87
458.35
326.33
17.48
7.58
12.96
13.49
0.00
0.00
59.82
30.27
186.22
163.49
130.84
126.06
42.36
41.69
92.39
82.73
271.83
234.31
0.00
0.00
3,344
2,724.53

2011-12 Based on Actual Tariff of 2011-12 (with restrain on Domestic Tariff)

83.1%
40.8%
83.4%
243.2%
95.7%
96.3%
91.6%
73.3%
93.3%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
93.69%
90.00%

Collection
Efficiency
166.6%
81.5%
71.2%
43.4%
104.1%
0.0%
50.6%
87.8%
96.3%
98.4%
89.5%
86.2%
0.0%
81.47%

Base Line RPU and RPU revision due to change in Tariff .1/2

Base Line RPU as on April 1, 2012 Khurda Electrical Division

Input Units in MU
Billin Units in MU
Billing in Rs. Lakh
Collection in Rs. Lakh
RPU Base Year
Billing Efficiency
Collection Efficiency

430.0
250.6
13064.93
11627.69
2.70382
58.28%
89.00%

2.49
1.21
6.41
18.45
470.14
1,283.48
663.05
148.01
5,905.82
0.00
0.00
0.00
0.00
0.00
0.00
8,499.05
13,064.95

Billing
in Rs Lacs
24.83
3,198.58
473.86
17.48
12.96
0.00
65.98
202.93
141.80
46.20
101.24
280.03
0.00
4,565.90

Tariff
change in 2012-13

Page 38 of 62

RPU Base Year is calculated by superimposing RST of 2012-13 over the base year (FY 2011-12) consumer consumption mix. The RPU Base Year for subsequent years
will be calculated in the same principle as per the approved RST by the regulator in that particular year by superimposing over the base year consumer -consumption
mix. There shall be no change in Baseline RPU in during the duration of the Agreement due to addition or deletion of con sumers / change in consumer consumption
mix.
The final figures of Billing (MU), Billing (Rs.) and Collection (Rs.) have been adjusted for SD adjusted against EC, Interest on SD adjusted in EC, CESU's Own Consumption
and adjustment of ED from the total collection made. Please refer to the Exhibit 21.5 for methodologies and adjustments.

14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

1
2
3
4
5
6
7
8
9
10
11
12
13

20.2

Total

HT Total

Industries
LT Others
LT Total

Commercial

Domestic

Consumer Category

97,554

797

598
954
96,757

6,354

88,851

No. of
Consumer

408.0

136.8

5.5
6.1
271.2

12.4

247.2

11,073.6

7,729.5

317.1
225.0
3,344.1

730.2

2,071.9

Billing in Billing in
MUs
Rs Lacs

9,855.4

7,241.6

290
176
2,725

561

1,699

Collection in Rs

Billing Efficiency
94.87%
Coll Efficiency
89.00%
RPU Base Year = item (4 / 1)

408.0
Based on
New Tariff

5
6
7

Billing (Rs. Lac)

430.0

Coll(Rs. Lac) =item (3 X 6)

Billin MU

Indicative 2013 - 14
Input MU
Billin MU

Coll(Rs. Lac) =item (3 X 6)

408.0
Based on
New Tariff

430.0

5 Billing Efficiency
94.87%
6 Coll Efficiency
89.00%
7 RPU Base Year = item (4 / 1)

3 Billing (Rs. Lac)

Indicative 2014 - 15
Input MU
1
Billin MU

Coll(Rs. Lac) =item (3 X 6)

Coll(Rs. Lac) =item (3 X 6)

408.0
Based on
New Tariff

Indicative 2016 - 17
Input MU
430.0
408.0 2
Billin MU
Based on
New Tariff 3 Billing (Rs. Lac)

430.0 1

Billing (Rs. Lac)

Billin MU

Input MU

Billin MU

Coll(Rs. Lac) =item (3 X 6)

408.0
Based on
New Tariff

Page 39 of 62

5 Billing Efficiency
94.87%
6 Coll Efficiency
89.00%
7 RPU Base Year = item (4 / 1)

3 Billing (Rs. Lac)

2.70

11,627.69
94.87%
89.00%

408.0
13,064.93

430.0

Indicative 2017 - 18
Input MU
430.0

RPU 2012-13

4
Coll(Rs. Lac)
5 Billing Efficiency
6
Coll Efficiency

Indicative FY 2012 - 13

94.87%
5 Billing Efficiency
94.87% 5 Billing Efficiency
6 Coll Efficiency
89.00% 6 Coll Efficiency
89.00%
7 RPU Base Year = item (4 / 1) 7 RPU Base Year = item (4 / 1)

3 Billing (Rs. Lac)

Indicative 2015 - 16
Input MU
1

89.00%

93.69%

91.32%
78.12%
81.47%

76.78%

81.98%

Coll
Efficiency

Please note that the total collection for FY 2011-12 has been adjusted as earlier mentioned in Annexure 20.2. Please refer to Exhibit 21.5 for details

2.29

9855.42
94.87%
89.00%

Coll(Rs. Lac)
Billing Efficiency
Coll Efficiency
RPU without
indexation

408.0

11073.60

Billing MU

Billing (Rs. Lac)

430.0

FY 2011-12 - Based on Actual

Sample Calculation - RPU revision due to Change in Tariff 2/2

Sample Calculation RPU revision due to tariff

Input MU

20.3

Sample Calculation weekly/monthly Payment

Rs Crore
Rs Crore
Rs Crore
Rs Crore
Rs Crore
04-Nov-12
07-Nov-12
14-Nov-12
21-Nov-12
28-Nov-12

1.42
0.28
0.28
0.28
0.28

Month 2, Month 3 , Month 4 and Month 5 - Billing and Collection

Month 2 (Nov)
Month 3 (Dec)
Month 4 (Jan)
Month 5 (Feb)
1 Total Collections
Rs Crore
10.10
11.83
5.12
13.14
-Cash
Rs Crore
5.05
5.91
2.56
6.57
-Cheque
Rs Crore
5.05
5.91
2.56
6.57
2 MRDF
Rs Crore
0.33
0.34
0.33
0.34
3 MRCE
Rs Crore
0.32
0.33
0.32
0.33
4 SCC
Rs Crore
0.01
0.01
0.01
0.01
5 SD
Rs Crore
0.05
0.05
0.05
0.05
6 ED
Rs Crore
0.03
0.03
0.03
0.03
7 Misc Income DF
Rs Crore
0.04
0.04
0.04
0.04
8 Misc Income CESU
Rs Crore
0.01
0.01
0.01
0.01
9 Tax Collected by the DF (if any)
Rs Crore
0.00
0.00
0.00
0.00
0.25
0.25
0.25
0.25
10 Interest on SD of live consumers adjusted against ECRs Crore
11 CESUs own consumption
Rs Crore
0.08
0.08
0.08
0.08
12 Tax Collected by the DF (if any)
Rs Crore
0.00
0.00
0.00
0.00
13 Energy charge (1 - sum(2-7))
Rs Crore
9.64
11.35
4.66
12.66
14 Input Energy
MUs
32.69
38.64
38.64
42.50
15 RPU Current Month ((8)/(9)*10)
Rs/Unit
2.95
2.94
1.21
2.98
16 RPU Base Year
Rs/Unit
2.70
2.70
2.70
2.70
17 RPU Difference ((10)-(11))
Rs/Unit
0.24
0.23
-1.50
0.27
18 Share of Operator (60% of (12))
Rs/Unit
0.15
0.14
-0.90
0.16
19 Revenue Sharing ((18)*(14))
Rs Crore
0.48
0.54
-3.47
0.70
Units
Date
Amount Date
Amount Units
Date
Amount Date
Amount
20 Monthly Bill
Rs Crore
30-Nov-12
0.86 31-Dec-12
0.93 Rs Crore 31-Jan-13
-3.09 28-Feb-13
1.10
Month 3 (Sept)
Month 4 (Oct)
Month 5 (Nov)
Month 6 (Dec)
Remaining Payment BY CESU for Previous Month
after reconcilliation (20-sum(21-25) of previous
Rs Crore
04-Dec-12
-0.28 04-Jan-13
0.24 Rs Crore 04-Feb-13
-3.83 04-Mar-13
1.10
21 month)
07-Dec-12
0.17 07-Jan-13
0.19 Rs Crore 07-Feb-13
0.00 07-Mar-13
0.22
22 Payment By CESU for Current Month Advance ((16)/5Rs Crore
14-Dec-12
0.17 14-Jan-13
0.19 Rs Crore 14-Feb-13
0.00 14-Mar-13
0.22
23 Payment By CESU for Current Month Advance ((16)/5Rs Crore
24 Payment By CESU for Current Month Advance ((16)/5Rs Crore
21-Dec-12
0.17 21-Jan-13
0.19 Rs Crore 21-Feb-13
0.00 21-Mar-13
0.22
28-Dec-12
0.17 28-Jan-13
0.19 Rs Crore 28-Feb-13
0.00 28-Mar-13
0.22
25 Payment By CESU for Current Month Advance ((16)/5Rs Crore

e.g. Month 4 the DF shall have to remit Rs. ( (2.70-1.21)*38.64/10 + 0.19*4) - (0.33 + 0.01 + 0.04)= 6.149 crore

Page 40 of 62

In case of RPU Current Month is less than RPU Base Year then the DF has to remit within 7 days to CESU the shortfall amount. Calculated as (RPU Base
Year Less RPU Current Month) * Input Plus money remitted by CESU as advance to the DF less (MR DF + SCC + Misc Income DF)

21 Payment BY CESU for First Month

22 Payment By CESU for Second Month Advance ((16)/5)
23 Payment By CESU for Second Month Advance ((16)/5)
24 Payment By CESU for Second Month Advance ((16)/5)
25 Payment By CESU for Second Month Advance ((16)/5)

Month 1 - Billing and Collection

S.No.
Units
Month 1 (Oct)
S.No.
1 Total Collections
Rs Crore
9.39
1(a)
-Cash
Rs Crore
4.69
1(a)
1(b)
-Cheque
Rs Crore
4.69
1(b)
Rs Crore
0.32
2 MRDF
3 MRCE
Rs Crore
0.30
4 SCC
Rs Crore
0.01
5 SD
Rs Crore
0.05
6 ED
Rs Crore
0.03
Rs Crore
0.04
7 Misc Income DF
8 Misc Income CESU
Rs Crore
0.01
9 Tax Collected by the DF (if any)
Rs Crore
0.00
10 Interest on SD of live consumers adjusted against EC Rs Crore
0.25
11 CESUs own consumption
Rs Crore
0.08
12 SD adjusted against EC
Rs Crore
1.00
13 Energy charge (1 - sum(2 to 9) + sum (10 to 12) )
Rs Crore
9.97
14 Input Energy
MUs
30.36
Rs/Unit
3.28
15 RPU Current Month (13 / 14)
16 RPU Base Year
Rs/Unit
2.70
17 RPU Difference (15-16)
Rs/Unit
0.58
18 Share of Operator (60% of (17))
Rs/Unit
0.35
19 Revenue Sharing ((18)*(14))
Rs Crore
1.05
Units
Date
Amount
20 Month Bill ((19)+(2)+(4)+(7))
Rs Crore 31-Oct-12
1.42
Payments in Month 2 (August)

20.4

20.5

Approved Capital Expenditure Plan of CESU in the Franchise Area

Sl
No
1
2
3
4
5
6
7

New Primary Sub-Station

Rs.
Crore
2.19

Up gradation of Power
Transformer and Accessories

11.39

Particulars

Renovation of Primary Sub-station

Supply, Installation of new HV
Lines
Up gradation of HT System
AB Cables
Up gradation of secondary substation
Total

0.82
5.57
5.46
1.41
26.84

The Capex (for Phase I) is on the work basis.

Page 41 of 62

20.6

Work Plan for Capital Work (Capex) by the DF

0-12
months

(100

kVA

&

AB Cable (in km)

DT Capacitors (Capacitors bank) [DT
having PF 0.8 or below]
Customer Care (In Rs. Crore)

25-36
months

3748months

49-60
months

69

69

69

69

35

1500

2000

1500

59

11kV Feeder AMR Metering (No.s)

DT AMR Metering
above)No.s

13-24
months

1084

1.00

Page 42 of 62

20.7

Work plan for Consumer Metering including Smart Meters / AMRs

(not included in capex) by the DF

Activities
Smart Metering / Communication
Metering in numbers

Year 1

Year 2

19400

48500

Year 3 Year 4
29100 -

Year 5
-

Page 43 of 62

20.8

Expected plan for O&M Expenditure excluding Establishment Cost

0-12 months 13-24 months 25-36 months 37-48months 49-60 months

LT
Pole
Maintenance (in
Rs. Lakhs)
LT
Line
Maintenance (in
Rs. Lakhs)
Fuse Call Centre
(in Rs. Lakhs)
Tree Pruning,
Phase
balancing, DT
Earthing,
Neutral
Balancing,
Loose
point
tightening
(in
Rs. Lakhs)
Any
other
related items (in
Rs. Lakhs)

118

142

104

109

115

150

175

181

187

194

141

195

207

220

233

47

51

42

44

47

289

385

413

438

465

Page 44 of 62

20.9

Plan for AT&C loss trajectories

Year 1

Year 2

Year 3

Year 4

Year 5

Cumulative
Minimum

15%

25%

35%

35+%

35++%

Quoted

22.5%

33.1%

39.8%

42.6%

43.5%

Present AT&C loss level for FY 2011-12 is 48.13%

Achieving prevailing BST at the end of 25th Month and AT&C Loss at about 15% at the end of 60th
month

Page 45 of 62

20.10

Year wise Revenue Share Offered to CESU

Year 1

Year 2

Year 3

Year 4

Year 5

Minimum

40%

50%

50%

50%

50%

Quoted

X = 64%

X = 53%

X = 53%

X = 60%

X = 60%

Page 46 of 62

20.11

Write-up on Business Plan (including Approach and Methodology)

DF shall comply with the Business Plan including the Approach & Methodlogy submitted by
FeedBack Infrastructure Services Private Limited in its Technical & Financial Proposal dated
16.08.2012 in response to Request For Proposal(RFP) dated 06.07.2012 issued by CESU which shall
form part of this agreement.

Page 47 of 62

HT

LT

Total Metered Energy

Percentage of Metered
Billing w.r.t. Input Energy

at

Metered
Billing

Cross-over, if applicable

Sum of 1-3

Other
input
distribution level

Dist.

Column Name

Sr.
No.

8/5 *100

Sum 6-7

Energy Sales to Low Tension Consumers

Energy Sales to High Tension Consumers

Energy exchange from adjacent divisions

Energy input other than non-EHV source like CPPs, IPPs,

NCE generation sources, small hydro, inter-divisional and
inter-discom etc.

Energy sent to electrical division from 132 / 33 or 220 /

33kV grid substations on 33kV / 11kV feeders

Description

Energy Audit (At the completion of each FY)

Total
input
Energy

Energy Input

20.12

Distribution Franchisee

Distribution Franchisee

Joint Meter Readings by CESU,

OPTCL and the Distribution
Franchisee

Source of data

Page 48 of 62

Only mutually agreed transactions

considering inter-division import /
export.

Remarks

Total Unmetered Energy

% Unmetered energy
w.r.t. Input Energy

11

12

15

Loss
in
percentage

13

LT

10

14

Energy

HT

Loss

Total
Sales

Unmetered
Energy

14/5

5-14

9+13

11/5 %

Sum 10-11

Energy Sales to Low Tension Consumers

Energy Sales to High Tension Consumers

Distribution Franchisee

Distribution Franchisee

Page 49 of 62

21.

Exhibits

21.1

(a) Format of Performance Bank Guarantee

PROFORMA FOR BANK GUARANTEE FOR PERFORMANCE
(To be executed on Rs. 100/- Non-judicial Stamp Paper purchased in the name of the BG Issuing Bank)

This Guarantee Bond is executed this ____ day of ___________________________20..

by us, the
________________________________ _______________ Bank at (address) ___________________ P.O.__________ P.S.
____________Dist ________________ State __________

nd

Whereas the CENTRAL ELECTRICITY SUPPLY UTILITY OF ODISHA, Head Office IDCO Towers (2 Floor), Bhubaneswar 751
022 a Body Corporate, constituted pursuant to the Central Electricity Supply Utility of ODISHA (Operation & Management)
Scheme 2006 promulgated by OERC under Section 22 of the Electricity Act 2003 (here in after called the CESU /Licensee)
represented by Chief General Manager, Commerce executed a contract agreement vide agreement no. .dated
. (hereinafter called the Agreement or the DFA) with M/s . [a Company registered under provision of
the Companies Act, 1956 and having its registered office at_________________[and acting on behalf of its Consortium, as
applicable if any] (hereinafter referred to as the the Distribution Franchisee or the DF), which expression shall unless it be
repugnant to the subject or context thereof include its/their successors, administrators, executors and assigns) for
Implementing Projects on Smart Grid Solution for Energy Management and Energy Efficiency (SGS- EMEE) under BOT model
for [name of the division] under CESU. Whereas the DF has executed the DFA on ______and as per Article 16, in
the event of default and / or event of abandonment, the said performance bank guarantee shall be invoked by CESU
.
1.

Now, therefore, in consideration of the Licensee and the DF having agreed to execute the said DFA, we the
____________________ Bank, Address ____________________________ (code No. ________) (hereinafter
referred to as the Bank) do hereby undertake to pay to the Licensee an amount not exceeding Rs 10,000,000
only__ (Rupees One Crore only___) only against any loss or damage caused to or suffered by the Licensee by
reason of any breach by the said Distribution Franchisee(s) of any of the terms or conditions contained in the
said Agreement.

2.

We, the ______________________ Bank do hereby undertake to pay the amounts due and payable under the
guarantee without any demur, merely on a demand from the Licensee stating that the amount claimed is due by
way of loss or damage caused to or suffered by Licensee by reason of any breach by the said Distribution
Franchisee(s) of any of the terms or conditions contained in the said Agreement or by the reason of any breach
by the said Distribution Franchisees failure to perform the said Agreement. Any such demand made on the Bank
shall be conclusive as regards the amount due and payable by the Bank under this Guarantee. However, our
liability under this guarantee shall be restricted to an amount not exceeding Rs 10,000,000 only__ (Rupees One
Crore only___).

3.

We, the ________________________ Bank also undertake to pay to the Licensee any money so demanded not
withstanding any dispute or dispute raised by the Distribution Franchisee(s) in any suit or proceeding instituted/
pending before any court or Tribunal relating thereto our liability under this Agreement being absolute and
irrevocable. The payment so made by us under this bond shall be valid discharge of our liability for payment
there under and the Distribution Franchisee(s) shall have no claim against us for making such payment.

4.

We, the _________________________ Bank further agree that the guarantee herein contain shall remain in full
force and effect during the period that would be taken for the performance of the said Agreement and it shall
Page 50 of 62

continue to remain in force endorsable till all the dues of the Licensee by virtue of the said Agreement have
been fully paid and its claim satisfied or discharged or till Licensee certifies that the terms and conditions of the
said Agreement have been fully and properly carried out by the said Distribution Franchisee(s) and accordingly
discharge this guarantee and will not be revoked by us during the validity of the guarantee period.

Unless a demand or claim under this guarantee is made on us or with our Bhubaneswar branch at
________________________ (Name, address of the Bhubaneswar branch and code No.) in writing on or before
__________________ (date) we shall be discharged from all liability under this guarantee thereafter.
5.

We, the _________________________ Bank further agree that the Licensee shall have the fullest liberty without our
consent and without affecting in any manner our obligations hereunder to vary any of the terms and conditions
of the said Agreement or to extend time of performance by the said Distribution Franchisee(s) and we shall not
be relieved from our liability by reason of any such variation or extension being granted to the said Distribution
Franchisee(s) or for any forbearance act or omission on part of the Licensee or any indulgence by the Licensee to
the said Distribution Franchisee(s) or by any such matter or thing whatsoever which under the law relating to
sureties would but for this provisions have effect of so relieving us.

6.

The Guarantee will not be discharged due to change in the name, style and constitution of the Bank and or
Distribution Franchisee(s) and or the Licensee.

7.

We, the _________________________ Bank lastly undertake not to revoke this Guarantee during its currency except
with the previous consent of the Licensee in writing.

Dated ___________ the __________ day of Two thousand _________ .

Not withstanding anything contained herein above.

Our liability under this Bank Guarantee shall not exceed Rs 10,000,000 Only (Rupees One Crore Only ) only.

The Bank Guarantee shall be valid up to ( 90 days over and above the contract period of one year from the effective date)
only.

Our . branch at Bhubaneswar (Name & Address of the Bhubaneswar branch and code no.) is liable to pay the
guaranteed amount depending on the filing of claim and any part thereof under this Bank Guarantee only and only if you
serve upon us at our Bhubaneswar branch a written claim or demand and received by us at our Bhubaneswar branch on or
before Dt.__________ otherwise bank shall be discharged of all liabilities under this guarantee thereafter.

For _____________________________________

(Indicate the name of the Bank)

N.B.:
(1) Name of the Distribution Franchisee:

Page 51 of 62

(2) No. & date of the Agreement:

(3) Amount of P.O.:
(4) Name of the Issuing Bank:
(5) Name of the local Branch of the Issuing Bank:
(6) Amount of the Bank Guarantee:
(7) Name, Address and Code No. of the Bhubaneswar Branch of the Issuing Bank:
(8) Validity period or date up to which the agreement is valid:
(9) Signature of the Constituent Authority of the Bank with seal:
(10) Name & addresses of the Witnesses with signature:
(11) The Bank Guarantee shall be accepted only after getting confirmation from the respective Banks

Page 52 of 62

21.1

(b) Security Deposit

PROFORMA FOR BANK GUARANTEE FOR SECURITY DEPOSIT
(To be executed on Rs. 100/- Non-judicial Stamp Paper purchased in the name of the BG Issuing Bank)

This Guarantee Bond is executed this ____ day of ___________________________20..

by us, the
________________________________ _______________ Bank at (address) ___________________ P.O.__________ P.S.
____________Dist ________________ State __________

nd

Whereas the CENTRAL ELECTRICITY SUPPLY UTILITY OF ODISHA, Head Office IDCO Towers (2 Floor), Bhubaneswar 751
022 a Body Corporate, constituted pursuant to the Central Electricity Supply Utility of ODISHA (Operation & Management)
Scheme 2006 promulgated by OERC under Section 22 of the Electricity Act 2003 (here in after called the CESU /Licensee)
represented by Chief General Manager, Commerce having executed a contract agreement vide agreement no. .dated
. (hereinafter called the Agreement or the DFA) with M/s . [a Company registered under provision of
the Companies Act, 1956 and having its registered office at_________________[and acting on behalf of its Consortium, as
applicable if any] (hereinafter referred to as the the Distribution Franchisee or the DF), which expression shall unless it be
repugnant to the subject or context thereof include its/their successors, administrators, executors and assigns) for
Implementing Projects on Smart Grid Solution for Energy Management and Energy Efficiency (SGS- EMEE) under BOT model
for [name of the division] under CESU. Whereas the DF has executed the DFA on ____ and as per Article
16.7.2.4 and Article 8.2.3, in the event of default and / or event of abandonment or in case of failure in making payment /
transfer amount to CESU, the said Security Deposit bank guarantee shall be invoked by CESU
.
1.

Now, therefore, in consideration of the Licensee and the DF having executed the said DFA, we the
____________________ Bank, Address ____________________________ (code No. ________) (hereinafter
referred to as the Bank) do hereby undertake to pay to the Licensee an amount not exceeding Rs ______
(Rupees ___) only against any loss or damage caused to or suffered by the Licensee by reason of any breach by
the said Distribution Franchisee(s) of any of the terms or conditions contained in the said Agreement.

2.

We, the ______________________ Bank do hereby undertake to pay the amounts due and payable under the
guarantee without any demur, merely on a demand from the Licensee stating that the amount claimed is due by
way of loss or damage caused to or suffered by Licensee by reason of any breach by the said Distribution
Franchisee(s) of any of the terms or conditions contained in the said Agreement or by the reason of any breach
by the said Distribution Franchisees failure to perform the said Agreement. Any such demand made on the Bank
shall be conclusive as regards the amount due and payable by the Bank under this Guarantee. However, our
liability under this guarantee shall be restricted to an amount not exceeding Rs ___________only__ (Rupees
________only).

3.

We, the ________________________ Bank also undertake to pay to the Licensee any money so demanded not
withstanding any dispute or dispute raised by the Distribution Franchisee(s) in any suit or proceeding instituted/
pending before any court or Tribunal relating thereto our liability under this Agreement being absolute and
irrevocable. The payment so made by us under this bond shall be valid discharge of our liability for payment
there under and the Distribution Franchisee(s) shall have no claim against us for making such payment.

4.

We, the _________________________ Bank further agree that the guarantee herein contain shall remain in full
force and effect during the period that would be taken for the performance of the said Agreement and it shall
continue to remain in force endorsable till all the dues of the Licensee by virtue of the said Agreement have
been fully paid and its claim satisfied or discharged or till Licensee certifies that the terms and conditions of the
Page 53 of 62

said Agreement have been fully and properly carried out by the said Distribution Franchisee(s) and accordingly
discharge this guarantee and will not be revoked by us during the validity of the guarantee period.

Unless a demand or claim under this guarantee is made on us or with our Bhubaneswar branch at
________________________ (Name, address of the Bhubaneswar branch and code No.) in writing on or before
__________________ (date) we shall be discharged from all liability under this guarantee thereafter.
5.

We, the _________________________ Bank further agree that the Licensee shall have the fullest liberty without our
consent and without affecting in any manner our obligations hereunder to vary any of the terms and conditions
of the said Agreement or to extend time of performance by the said Distribution Franchisee(s) and we shall not
be relieved from our liability by reason of any such variation or extension being granted to the said Distribution
Franchisee(s) or for any forbearance act or omission on part of the Licensee or any indulgence by the Licensee to
the said Distribution Franchisee(s) or by any such matter or thing whatsoever which under the law relating to
sureties would but for this provisions have effect of so relieving us.

6.

The Guarantee will not be discharged due to change in the name, style and constitution of the Bank and or
Distribution Franchisee(s) and or the Licensee.

7.

We, the _________________________ Bank lastly undertake not to revoke this Guarantee during its currency except
with the previous consent of the Licensee in writing.

Dated ___________ the __________ day of Two thousand _________ .

Not withstanding anything contained herein above.

Our liability under this Bank Guarantee shall not exceed Rs _____________Only (Rupees __________Only ) only.

The Bank Guarantee shall be valid up to (90 days over and above the contract period of one year from the effective date)
only.

Our . branch at Bhubaneswar (Name & Address of the Bhubaneswar branch and code no.) is liable to pay the
guaranteed amount depending on the filing of claim and any part thereof under this Bank Guarantee only and only if you
serve upon us at our Bhubaneswar branch a written claim or demand and received by us at our Bhubaneswar branch on or
before Dt.__________ otherwise bank shall be discharged of all liabilities under this guarantee thereafter.

For _____________________________________

(Indicate the name of the Bank)

N.B.:
(1) Name of the Distribution Franchisee:
(2) No. & date of the Agreement:

Page 54 of 62

(3) Amount of P.O.:

(4) Name of the Issuing Bank:
(5) Name of the local Branch of the Issuing Bank:
(6) Amount of the Bank Guarantee:
(7) Name, Address and Code No. of the Bhubaneswar Branch of the Issuing Bank:
(8) Validity period or date up to which the agreement is valid:
(9) Signature of the Constituent Authority of the Bank with seal:
(10) Name & addresses of the Witnesses with signature:
(11) The Bank Guarantee shall be accepted only after getting confirmation from the respective Banks

Page 55 of 62

21.2

Deputation Rules of CESU

The competent Authority may in the interest of the business of the company depute any officer from time to time
from the service to work in posts or functions under subsidiary, associated or related companies engaged in
electricity industry in the state of ODISHA or elsewhere (including assignments abroad) or under the State or
Central Govt. or Govt. corporation or bodies for prescribed period or periods and the officer shall be obliged to
serve in such posts or functions.
The duration of deputation will be 2 years at the first instance and extendable up to a maximum of 7 years any
one instance. The terms and conditions applicable to such deputation shall be laid down by the Board or the
Committee of the Board from time to time.

Page 56 of 62

21.3

Retail Supply Tariff (Tariff Schedule) for Financial Year 2011-12

Page 57 of 62

Please refer to the Final RST Order by OERC for 2012-13 for further details

Page 58 of 62

21.4

Retail Supply Tariff (Tariff Schedule) for Financial Year 2012-13

Page 59 of 62

Please refer to the Final RST Order by OERC for 2012-13 for further details

Page 60 of 62

21.5

Methodology Followed for Calculating RPU

1. The input shall be summation of input energy at all the input points of the Apex meters fixed at secondary
side of the 132/33 kV transformers at Grid end as measured in the Gridco Bill plus import of energy less
export of energy from all the inter-discom / inter-divisional import and export points. For Baseline period
the input energy has been taken from April 2011 to March 2012.
2. Import / Export from unmetered points has been computed by taking actual meter reading for the period
available from the date of installation till the date of calculation; which has been proportionately
calculated for full FY 2011-12; otherwise it has been calculated based on load factor of 50% at PF of 0.9.
3. Billing MU and Billing Rupees in Lakhs are from the consumer database for the period April '11 to March
'12. Abnormal billing with 10,000 Units in any month in case of SBM billed consumers are considered for
deduction from total billed MU and amount.
4. Collection Rupees in Lakhs are from the consumer database for the period April 2011 to March 2012 and
Suspense / Unposted are based on the Collection Database received from the Division.
5. Input to HT consumers has been determined by taking the actual meter reading of the consumer meters
plus 8% T&D loss in HT network.
6. The EC, ED, DP and MC Collection split for 3-Phase LT and HT is as per consumer database and for SBM
collection, the Meter Rent is the same proportion as collected for 3-PH LT Plus HT and the ED is @ 3.85%
of the Total SBM Collection less Meter Rent Adjustment
7. Interest on Security Deposit for live consumers has been taken as deemed collection for such consumers
and the figure has been taken from consumer database. Security Deposit adjusted against EC Billing has
been taken as deemed collection.
8. Information relating to Deemed Collection for CESU Offices, Temporary Connection, Security Deposit
adjusted against EC Billing and Bounced Cheque for FY11-12 are as per the information provided by the
division and accordingly the adjustments has been made.
9. After the adjustments Baseline RPU (without indexation) has been derived by Total Collection divided by
Total Input in 2011-12
10. The Billing Amount for 2011-12 has been indexed as per the RST 2012-13 (explained in Annexure 20.2) and
the Indexed collection figure (in Rs.) has been derived based on the Indexed Billing Amount and
multiplying by actual Collection Efficiency of 2011-12.
11. The RPU Base Year which is indexed RPU has been derived by indexed Collection divided by the Baseline
Input (in MU).
12. There shall be no change in Baseline RPU during the duration of the Agreement, due to change in
Consumer Consumption mix and / or addition or deletion of consumers.

Page 61 of 62

498

ADD: TEMP-CONN.
(INPUT & BILLING)

ADD: DEEMED COLL.

FOR CESU OFFICE'S

ADD: SD ADJUSTED
AGAINST EC BILLS

LESS: BOUNCED
CHQ. COLL.

TOTAL

10

11

12

250.627

Billing Efficiency - E1

Base Energy Billed Rs.- (Excl. EHT) in Lacs

Base Energy Coll. Rs.- (Excl. EHT) in Lacs

Collection Efficiency - E2

Base RPU - (Excl. EHT) in Rupees

Base RPU - ROUNDED in Rupees

Y=(W/S)/10

X=W/V

W = J-L-N

V=E+G-P+Q-R

U=T/S

T=D

10,675.43

17.49

(6,522.02)

8,972.53

8,207.43

Current EC
(Rs.Lk.)

2.2900

2.2917

89.49%

9855.42

11013.24

58.28%

430.047
250.627

Actual

517.01

0.70

(262.96)

347.82

431.45

155.98

18.95

137.03

7)

5)
6)

4)

3)

2)

1)

93.88

(0.06)

23.18

70.76

Current
MC
(Rs.Lk.)

10,413.94

(158.39)

7.21

4.03

11.18

71.68

50.27

2,052.11

8,375.85

9,869.21

(149.48)

6.90

3.93

11.18

71.68

47.81

1,958.53

7,918.67

482.15

(7.74)

0.02

0.05

2.20

78.42

409.19

Cur. EDCur. EC-Coll

Coll
(Rs.Lk.)
(Rs.Lk.)

6.67

0.06

0.02

6.59

76.37

(1.17)

0.24

0.05

0.24

15.16

61.86

(20.46)

(20.46)

O=J-K-L-MN

Cur.
Cur.
Cur. MCExcessDPS-Coll Coll
Coll
(Rs.Lk.) (Rs.Lk.)
(Rs.Lk.)

102.74

56.60

46.14

Rebate
Alowed.
(Rs.Lk.)

514.19

65.86

448.33

Adj. DR.
(Rs.Lk.)

229.62

75.76

153.86

Adj. CR.
(Rs.Lk.)

Page 62 of 62

METHODOLOGY FOLLOWED:
Input MU information has been taken from BST Bill received and paid by CESU to GridCo for the period April '11 to
March '12 as provided by the division.
Billing MU, Billing Rupees & Collection Rupees in Lacs are from the consumer database for the period Apr'11 to
Mar'12. Abnormal billing with 10,000 Units in case of SBM consumers are considered to be abnormal & hence to be
deducted from total units and amount.
The EC, ED, DP and MC Collection split for 3-Phase LT and HT is as per consumer database and for SBM collection, the
MR is the same proportion as collected for 3-PH LT Plus HT and the ED is @ 3.85% of the Total SBM Collection less
Suspense / Unposted are based on the information provided by the division. It is bifurcated in same ratio as to total of
EC, EC, DP & MC collection for total SBM, 3Ph & HT Consumers.
Interest on SD is as per consumer database.
Information relating to Deemed Collection for CESU Offices, Temporary Connection, SD adjusted against EC Billing and
Bounced Cheque for FY11-12 are as per the information provided by the division
The bifurcated of bounced cheque amount in same ratio as to the ED& MC collection for 3Ph & HT Consumers.

11,442.30

18.19

(6,785.04)

9,362.48

8,846.67

I
=E+F+G+H

Current EC+
Total Coll.
DC+ED+
(Rs. Lk.)
DPS+MC
(Rs.Lk.)

KED-KHURDA [201]

Current
Current ED
DPS
(Rs.Lk.)
(Rs.Lk.)

DIVN:

Base Collection in Rs. Lakhs = (J- L- N) = 9855.42

Base Energy Input MU - (Excl. EHT) in MU

Base Energy Billed MU - (Excl. EHT) in MU

Particulars

FY 2011-12 (Actuals)

1
2

Sl.No.

KED-KHURDA [201]

0.334

(157.700)

256.032

151.961

Billed MU

RPU CALCULATION FOR FY 2011-12

97,965

67

27

ADD: INTEREST ON
S.D AMT. SBM

(87)

LESS : ABNORMAL
SBM BILL 10000
UNITS

33KV
DISCONNECTED
CONSUMERS

ADD: SUSPENSECOLL. INCL. TEMP

COLL.
ADD: INTEREST ON
S.D AMT. LTH+HT
LESS FOR 33KV D/C

95,317

1-PH (SBM)
CONSUMERS

2,237

Cons.
Nos

3-PH LT + HT
CONSUMERS

Category

Sl No.

REVENUE PARAMETERS FOR FY 2011-12