IMPLEMENTATION AGREEMENT FOR HYDRO …environmentportal.in/files/file/3_ Implementation...Implementation Agreement ANNEXURE-IV 29 IMPLEMENTATION AGREEMENT FOR HYDRO POWER PROJECT (From

Implementation Agreement ANNEXURE-IV

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IMPLEMENTATION AGREEMENT FOR HYDRO POWER PROJECT (From 2 to 100 MW Capacity)

This Implementation Agreement (the Agreement) made on this ----------- day of the month of ---------- of-----------

BETWEEN The Jammu & Kashmir State Power Development Corporation Limited registered under the Companies Act, 1956 having its registered office at Srinagar, through Shri _____________, Managing Director, J&K State Power Development Corporation, at ________________________ (herein after referred to as Corporation which expression unless repugnant to the context or meaning thereof, shall include its successors, administrators or permitted assigns), of the FIRST PART;

AND

M/s ………………………………. having its registered office at (hereinafter referred to as the Independent Power Producer (IPP) which expression shall unless repugnant to the context or meaning thereof, include its successors, administrators or permitted assigns), through ________________ who has been duly authorized by the IPP vide their resolution dated ………………. to execute the Agreement, of the SECOND PART. WHEREAS

A. JKSPDC is the State's nodal agency for the development of hydro power for projects above 2 MWs in the State of Jammu & Kashmir;

B. The IPP has been allotted the Project through a competitive bidding process.

C. The IPP shall carry out the necessary detailed investigations and

confirmatory surveys, prepare and submit the Detailed Project Report (DPR) for Techno Economic Clearance (TEC) leading to the implementation of the Project by the IPP. The IPP shall satisfy itself about the techno-economic viability of the Project and obtain all statutory clearances and approvals from the concerned authorities; and shall implement the project as per the schedule/milestones indicated in the RfQ Bid documents/TEC and this agreement.

D. The IPP is now desirous of undertaking the implementation of the project in

accordance with the conditions set forth in this Agreement.

NOW THEREFORE IN CONSIDERATION OF THE PREMISES AND MUTUAL COVENANTS AND CONDITIONS SET FORTH HEREIN, THE AGREEMENT WITNESSETH AS FOLLOWS:


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ARTICLE-1 DEFINITIONS & INTERPRETATIONS

1.1 DEFINITIONS

In this Agreement, the following words and expressions shall have the respective, meanings set forth below, unless the context otherwise requires:

1.1.1 "Agreement" shall mean this Agreement together with all its annexes and any

amendments thereto made in accordance with the provisions contained herein.

1.1.2 "Agreement Period" shall have the meaning as specified in Article 2. 1.1.3 "Applicable Laws" shall mean all laws as are in force for the time being and

applicable in the state of Jammu & Kashmir including rules and regulations made thereunder, and judgments, decrees, injunctions, writs and orders of any court of record , during the subsistence of this Agreement.

1.1.4 Applicable Permits" shall mean all clearances, permits, authorizations,

consents and approvals required to be obtained or maintained under Applicable Laws in connection with the design, engineering, financing, procurement, construction, operation and maintenance of the Project /Site during the subsistence of this Agreement.

1.1.5 “Arbitration Act" means the Jammu & Kashmir Arbitration and Conciliation

Act, 1997 and the rules made thereunder.

1.1.6 “BOOT” shall mean Build, Own , Operate and Transfer. 1.1.7 “CEA/Authority" shall mean the Central Electricity Authority constituted under

Indian Electricity Act, 2003 or its successors. 1.1.8 “CERC” shall mean Central Electricity Regulatory Commission.

1.1.9 "Commercial Operation" shall mean the state of unit/Project when unit

/Project is capable of delivering Active Power and Reactive Power on a regular basis after having successfully completed the commissioning tests as per Prudent Utility Practices.

1.1.10 "Commercial Operation Date (COD)" shall mean the date on which the

Commercial Operation of Unit /Project as the case may be is achieved by the IPP.

1.1.11 “Committed Power” shall mean the power to be procured by J&K from the

Project as per the quantum specified in the bidding document on the tariff determined through the bidding process.


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1.1.12 “Concession Period” shall mean 35 years of operation of the project by the IPP from scheduled COD.

1.1.13 "Contractor" shall mean any person, firm or body corporate engaged by the

IPP for the implementation/operation of the Project. 1.1.14 "Control Centre" or "State Load Dispatch Centre" or "SLDC" shall mean the

J&KPDD's Load Dispatch Centre located at Bemina Srinagar/Gladni Jammu or such other control centre designated by J&KPDD from time to time (but not more than one at a time) wherefrom Dispatch Instructions shall be issued by J&KPDD to the IPP / Station. The control centre/SLDC will work in close co-ordination with Northern Regional Load Dispatch Centre (NRLDC).

1.1.15 "Debt" shall mean the amount of any loan, non-convertible debenture or

other financial facility, raised and received by the IPP under the Financing Agreements, and actually expended (or to be expended) for the Project and which shall not be greater than the principal amount of debt specified in the applicable currency in the estimate of Project Cost as per the DPR.

1.1.16 "Deliverable Energy" shall mean the electrical energy generated at the

Station, as measured at generator(s) terminals less the summation of the following:-

i) Actual auxiliary consumption for the bonafide use of auxiliaries,

lighting and ventilation in the Power Station and intake works and the transformation losses (from generation voltage to transmission voltage) of the step up transformers at the power house switchyard;

ii) Transmission losses at actual, which shall be the difference of the electrical energy measured at sending and receiving ends of the transmission line (i.e. the station end and the interconnection point).

For this purpose and subject to above, the energy meter reading shall be taken on monthly basis at the Inter Connection Point.

1.1.17 "Dispatch" means to schedule and control the generation of the Project in order to commence, increase, decrease or cease the electrical output as delivered to the Grid System in accordance with J&KPDD's instructions from the Control Centre in conformity with the Agreement and Prudent Utility Practices.

1.1.18 "Dispatch Instruction" shall mean an instruction issued by the Control Centre

to the IPP for the Dispatch of power by message to be confirmed in writing / fax by Control Centre in accordance with the operating procedure developed by the Parties to operate the Project in accordance with the terms of this Agreement, technical limits and Prudent Utility Practices including:


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a. An instruction to target active / reactive power output to be maintained by the Project;

b. An instruction to synchronize or desynchronize a unit at a

particular time;

c. An instruction to defer or cancel a scheduled outage or maintenance outage;

d. An instruction for backing down the active / reactive power due to

Grid conditions. '

1.1.19 "Detailed Project Report" shall mean the Project Report submitted by the IPP after carrying out necessary detailed investigations and confirmatory surveys in the form as prescribed in the Bid Document.

1.1.20 "Dispute" shall have the meaning as specified in Article 12. 1.1.21 “Distribution System” means the system of wires and associated facilities

between the delivery points on the transmission lines or the generating station connecting and the point of connection to the installation of the consumer.

1.1.22 “Effective Date" shall mean the date of signing of this Agreement. 1.1.23 “Energy” means the electrical energy in kilowatt hours (Kwhs). 1.1.24 "Equity" shall mean the aggregate of all subscribed and paid up share capital

of the IPP in different currencies as converted to Rupees, by application of the procedure approved by the applicable Authority/Government of J&K, as invested in the Project and held by one or more shareholders in the IPP, which shall be in accordance with the financial plan.

1.1.25 "Financial Closure" shall mean the date on which the Financing Documents

providing for funding by the Lenders have become effective and the IPP has immediate access to such funding under the Financing Documents.

1.1.26 "Financing Documents" means the documents executed by the IPP in respect

of financial assistance to be provided by the Lenders by way of loans, guarantees, subscription to non-convertible debentures and other debt instruments including loan agreements, guarantees, notes, debentures, bonds and other debt instruments, security agreements, and other documents relating to the financing (including refinancing) of the Project and includes amendments or modifications made from time to time.

1.1.27 "Financing Package" means the financing package of the Project indicating

the Project Cost and the means of financing thereof as per the DPR. 1.1.28 "Force Majeure" shall have the meaning as ascribed thereto in Article 9.


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1.1.29 ‘Free Energy” shall mean the energy available to the Corporation free of

charges from the project based on the offer of the IPP during bidding process.

1.1.30 “Free Power” shall mean the free capacity available to the Corporation from the project without any charges as per the offer given by IPP during bidding process. The free capacity shall be more than the minimum capacity prescribed in the bidding document

1.1.31 "GoI" shall mean the Government of India. 1.1.32 “GoJK/Government” shall mean the Government of Jammu & Kashmir. 1.1.33 "Grid/Grid System" means the interconnected electrical transmission and

distribution system of the state of Jammu & Kashmir including the Interconnection Facility and all other transmission lines and other equipment in the State of Jammu & Kashmir on the J&KPDD's side of the Interconnection point.

1.1.34 "Interconnection Facilities" shall mean all the facilities which shall include

without limitation, switching equipment, communication, protection, control and metering devices etc. at the Interconnection Point(s) to be installed and maintained at the cost of the IPP to enable evacuation of power output from the Project in accordance with this Agreement.

1.1.35 "Interconnection Point(s)" shall mean the physical touch point at Sub-

Station(s) of J&KPDD/ local grid/rural power distribution entities where the Project's transmission line for evacuating the power from the Project is connected to the Grid/ local grid/ rural power distribution entities.

1.1.36 "IPP" means M/s ......................... having its registered office at................................... may be in the form of a single firm/Corporation, partnership firm, of Indian or foreign origin or consortium or joint venture of such entities who may individually or jointly commit to implement the project, and shall, unless repugnant to the context or meaning thereof, also include their successors, administrators or permitted assigns.

1.1.37 “LC” means irrevocable letter(s) of credit. 1.1.38 “Month” means English calendar month. 1.1.39 "MoEF" shall mean Ministry of Environment & Forests, GoI or its successor

authority/agency. 1.1.40 "NRLDC" shall mean "Northern Regional Load Dispatch Centre" or its

successor entity.


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1.1.41 "Net Saleable Energy" means the electrical energy in kWhr, delivered by the IPP at the Interconnection Point, less the free energy.

1.1.42 “Open Access charges” shall be defined as per the JKSERC, Regulations 2006.

1.1.43 "Parties" shall refer to the Corporation and the IPP collectively. 1.1.44 "Party" shall refer to the Corporation and/or the IPP individually. 1.1.45 "Permanent Works" shall mean the permanent works forming part of the

Project that are required to be constructed/installed and maintained as such for the implementation/operation of the Project for at least the Agreement Period and shall also include housing facilities for staff to be engaged for operation and maintenance of the Project.

1.1.46 “Person” shall include any IPP or body corporate or association or body of

individuals, whether incorporated or not, artificial juridical person. 1.1.47 "Premium" shall mean the following:

a. “Premium" shall mean an amount not less than Rs.4,00,000/- (Four lacs only) per MW for 2-25 MW Projects, not less than Rs.6,00,000/-(Six Lacs only) per MW for projects above 25MW and upto 50MW and not less than Rs 8,00,000/-(Eight Lacs only) per MW for projects above 50 MW and upto 100 MW paid to Corporation after award of work as detailed in Article 3.

1.1.48 "Project" shall mean the ……………small hydro electric project having an

installed capacity of …. MW as per Detailed Project Report and proposed to be established on …….stream/nallah/River, a tributary of ….. River of …… Basin in the ….. District in the State of Jammu & Kashmir, India including complete hydroelectric power generating facility covering all components such as diversion, intake works, water conductor system, power station, generating units, project roads, bridges, offices, residential facilities, stores, guest houses and other connected facilities including the switchyard transmission line Interconnection Facilities.

1.1.49 "Prudent Utility Practices" shall mean those practices, methods, techniques

and standards, as changed from time to time, that are generally accepted internationally by electric utilities for the purpose of ensuring safe, efficient and economic design, engineering, construction, commissioning, testing, operation and maintenance of various components of the Project of the type specified in this Agreement and which practices, methods and standards shall be adjusted as necessary to take into account:

i) installation, operation and maintenance guidelines

recommended by the manufacturers of plant and equipment to be incorporated in the Project;

ii) the requirements of Indian Law as applicable in J&K State;


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iii) conditions affecting the Grid System; and iv) Physical conditions at the Site.

1.1.50 “Power” means the electrical power in MWs. 1.1.51 “RfQ Bid Documents” shall mean the Bid Document (Request for

qualification) issued by the Corporation for participation of private developers in hydro power sector in the state of J&K issued by the J&K State Power Dev. Corporation in pursuance of which the IPP was declared technically and financially qualified to participate in the RfP process .

1.1.52 “RfP bid documents” shall mean the Bid document (Request for Proposal) issued by the Corporation to qualified bidders for submission of their proposal/offer based on which the award of the project was made to the eligible bidder.

1.1.53 “RMU” means renovation, modernization and uprating. 1.1.54 "Scheduled Commercial Operation Date" shall mean the date by which IPP

shall have achieved the Commercial Operation of the Project which shall be fixed by the corporation while according TEC.

1.1.55 “SERC” means the State Electricity Regulatory Commission. 1.1.56 "SPCB" means the State Pollution Control Board. 1.1.57 "Site" shall mean the site of Project appurtenances, generating plant

including land, waterways, roads and any rights acquired or to be acquired by IPP for the purposes of the Project.

1.1.58 "State" shall mean Jammu & Kashmir. 1.1.59 "Station" shall mean the designated hydel power station of the IPP.

1.1.60 “SLDC” shall mean the State Load Dispatch Centre, an apex body to ensure

integrated operation of the power system in the State.

1.1.61 “TEC” shall mean Techno Economic Clearance. 1.1.62 "Temporary Works" shall mean all temporary works of any kind required in

connection with the implementation of the Project and that are incidental and ancillary to the design, engineering and construction of the Project and are constructed/installed and maintained till the Commercial Operation Date for the Project, and not forming part of Permanent Works.

1.1.63 “Terminal Price” shall mean the cost to be paid by the Corporation to the IPP after expiry of concession period at the time of handing over of the project which shall not be more than 10% of the tentative estimated cost of the project indicated in the bidding document


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1.1.64 “TOD” means the time of the day for purpose of metering. 1.1.65 “Transmission line” means all high pressure cables and overhead lines ( not

being an essential part of the distribution system of a licensee) transmitting electricity from generating station to another generating station or a substation, together with any step up and step down transformers, switchgear and other works necessary to and used for the control of such cables or overhead lines, and such buildings or part thereof as may be required to accommodate such transformers, switchgear and other works.

1.1.66 "J&KSERC" means Jammu & Kashmir State Electricity Regulatory Commission

or its successor or its legal assignee. 1.1.67 "Unit" shall mean one hydro turbine generator including ancillary equipment

and facilities thereto. 1.1.68 "J&KPDD" means Jammu & Kashmir Power Development Department or its

successor or its legal assignee. 1.1.69 “Wheeling” means the operation whereby the distribution system and

associated facilities of a transmission utility/ licensee or distribution utility/licensee, as the case maybe, are used by another person for the conveyance of electricity on payment of charges.

1.1.70 "Works" shall mean all works of civil, electrical, mechanical, control and

instrumentation in nature and including design, engineering, services, supplies and other work activities required and necessary for the implementation of the Project and shall also include the Permanent Works and the Temporary Works.

1.1.71 “Year” shall mean financial year commencing on 1st April and ending 31st

March.

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1.2 INTERPRETATIONS In this Agreement, unless the context otherwise requires:

1.2.1 Any reference to a statutory provision shall include such provision as is from time to time modified or re-enacted or consolidated so far as such modification or re- enactment or consolidation applies or is capable of applying to any transactions entered into hereunder.

1.2.2 The references to persons and words denoting natural persons shall include

bodies corporate and partnerships, joint ventures and statutory and other authorities and entities.

1.2.3 The nomenclature of the Agreement, headings and paragraph numbers are

for the convenience of reference and shall be ignored in construing or interpreting the Agreement.

1.2.4 Any reference at any time to any agreement, deed, instrument, license or

document of any description shall be construed as reference to that agreement, deed, instrument, license or other document as amended, varied, supplemented, modified or suspended at the time of such reference provided that this Clause shall not operate so as to increase the liability or obligations of any Party hereunder or pursuant hereto in any manner whatsoever.

1.2.5 Any reference to any period commencing "from" a specified day or date and "till" or "until" a specified day or date shall include both such days or dates.

1.2.6 Unless otherwise expressly provided in this Agreement, any Documentation

required to be provided or furnished by the IPP to GOJK and/or Corporation shall be provided free of cost and in three copies and if GOJK or Corporation are required to return any such Documentation with their comments and/or approval, they shall be entitled to retain two copies thereof.

1.2.7 The words / expressions used in this Agreement but not defined herein,

unless repugnant to the context, shall have the same meaning as assigned to them in the RfQ bid document and /or other agreements drawn between the parties of the project in respect as amended from time to time. The words / expressions used in this Agreement shall bear the same meaning as assigned to them in the context in which these have been used in this Agreement provided that their irrespective meaning, if any, assigned to such undefined word / expressions in the J&K Electricity Act 2010, as in force, shall also be taken into consideration for harmonious interpretation of the Agreement.

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ARTICLE 2 TERMS OF THE AGREEMENT

2.1 Effectiveness The Agreement shall come into force with effect from the Effective Date.

2.2 Agreement Period The Agreement shall remain in force up to a period of Thirty Five (35) years from the Scheduled Commercial Operation Date fixed while according TEC, unless terminated earlier in accordance with the provisions of this Agreement.

2.3 Renewals

The IPP may request the Corporation for extension of the Agreement Period, at least one (I) year prior to the expiry of the Agreement Period; the term of this Agreement could be extended on such terms and conditions as are mutually agreed between the Parties.

2.4 a. Transfer of Project

At the end of the Concession Period, the projects shall be ordinarily transferred to JKSPDCL on payment of terminal value without any encumbrances. The concession period may, however be, extended beyond 35 years on mutually agreed terms and conditions.

b. Maintenance of the Project

“The Project assets would be maintained by the IPP in a condition that would ensure residual life of the project at the rated capacity for at least 20 years at any point of time including the time of transfer of the project to the State by the IPP. JKSPDCL or its authorized agencies would carry out mandatory inspections on regular basis to ensure the same. The IPP shall provide unhindered access to JKSPDCL to the project”. If such inspections reveal that the plant capacity and/or residual life of the project are being undermined due to inadequate maintenance or insufficient capital infusion, JKSPDCL shall order remedial measures to be taken by the IPP. If the IPP fails to comply with these directions, the JKSPDCL shall be at liberty, after providing due opportunity of being heard to the IPP, to terminate the concession period. While doing so, a termination compensation value shall be determined on the basis of estimated net cash flows to equity shareholders for the next ten years or residual period of concession, whichever is less, discounted at a suitable rate. Both, the assessment of cash flows as well as the discount rate, would be as per the approval of JKSERC which will also factor in the costs of recapitalization, refurbishment,


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renovation, repairs, etc. required to bring the project to the necessary standards.

2.5 Project Cost / Implementation The actual expenditure incurred on the project as approved by JKSERC shall be a criterion for firming up of the tariff. The GoJK/Corporation will monitor the project implementation with the right to advice the IPP to develop a cost effective project.

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ARTICLE 3

PROJECT AWARD The Project has been awarded to the IPP on the following terms & conditions. Project Premium:

3.1 “Premium" shall mean an amount not less than Rs.4,00,000/- (Four lacs

only) per MW for 2-25 MW Projects, not less than Rs.6,00,000/-(Six Lacs only) per MW for projects above 25MW and upto 50MW and not less than Rs 8,00,000/-(Eight Lacs only) per MW for projects above 50 MW and upto 100 MW paid to Corporation after award of work.

3.2 The Bank Guarantee provided as mentioned in the preceding paragraph shall

be valid at least upto the time of Financial Closure and shall be encashable at the time of Scheduled Financial Closure whichever is earlier or the Actual Financial closure of the Project or failure of the IPP to reach any of the mile stone indicated in the RFQ document, whichever is earlier.

3.3 The IPP shall be responsible for the payment of any taxes, charges and fees in

connection with the Project Premium and Bank Guarantee. Free Power: 3.4 The IPP shall provide free power to J&K at the rate of _____% (minimum of 15

% apart from 1 % for LADF). Terminal Value: 3.5 The Terminal value to be paid to the IPP at the end of Concession Period shall

be Rs._________.

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ARTICLE 4

SALE OF POWER AND ROYALTY ENERGY

4.1 Disposal of Power : 4.1.1 IPP shall supply -------% of power to J&K after netting off free power and

LADF. (In respect of Projects upto 25 MWs the quantum of this power shall be 30 % and in respect of projects above 25 MWs its quantum shall not be less than 30 %). The IPP shall supply this power at a levelised tariff of Rs -------- per unit for 35 years (for Projects above 25 MW) .In case of Projects upto 25 MW the tariff for the power procured by J&K shall be determined by the Regulator.

The IPP shall, after allowing for J&K’s share of power including free power, be free to sell the balance power as it deems fit, within or outside the State. In case of sale to the State, its supply shall be metered at interconnection point.

For supply of balance power (other than committed power to J&K), the State

Transmission/Distribution networks of transmission/distribution Utility, can be utilized for which open access charges shall be borne by the IPP as per JKSERC regulations. T&D losses will also be borne by the IPP, as per JKSERC regulations.

4.1.2 All the sales of the energy generated by the Project would be approved, as may be required, by the J&KSERC.

4.2 Free Energy

4.2.1 Free energy shall be as per the offer made by the IPP during the bidding process and shall be due from the scheduled COD.

4.2.2 1% free power for LADF also shall be applicable and due from the developer immediately on Scheduled COD. The free power on account of LADF shall be utilized as per the provisions of Hydro Policy 2008.

4.2.3 Free Power for Royalty, LADF will be calculated as per actual generation for projects commissioned as per schedule or earlier. However, in case of projects which are commissioned beyond scheduled date the same shall be applicable from the date of scheduled COD, except in case of the delay on an account of force majeure and reasons beyond the control of the developer

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ARTICLE-5

OBLIGATIONS

5.1 Obligations of the IPP

5.1.1 (i) Timelines for execution of a project allotted to an IPP shall be as follows:-

Activity Indicative Timelines *(in months)

2-25 MWs 25-100 MWs

Letter of Award T0 T0

Payment of Upfront Premium along

with Performance Guarantee (@ Rs

10 lac per MW) by the IPP.

T0 + 2 T0 + 2

Investigation & submission of DPR by

the IPP

T0 + 18 T0 + 24

TEC of DPR by JKSPDCL after

submission of all the necessary

documents and clarifications by the

IPP

T0 + 22 T0 + 28

Signing of Implementation

Agreement between the IPP &

JKSPDCL

T0 + 23 T0 + 29

Obtaining of all Clearances and

achieving Financial Closure by the

IPP

T0 + 30 T0 + 40

Scheduled COD of the Project Shall be fixed by

JKSPDCL while

according TEC

Shall be fixed by

JKSPDCL while

according TEC

* The timelines indicated in this Table generally give the maximum period

required for a particular step in execution of a project. The timelines may

be specifically stated for particular projects on considerations of

availability of the DPR, clearances, site suitability, etc.

(ii) The IPP shall submit quarterly progress reports in respect of obtaining statutory clearances/approvals and achieving Financial Closure of the Project. The IPP shall also provide two copies each of the statutory clearances/approvals, as and when the same are obtained.

(iii) The IPP shall submit to the Corporation two copies each of the Project related Agreements including in particular the Construction Contracts / EPC Contract, if any, the Financing Documents and the O&M Contract, if any. The IPP shall ensure that these Project related Agreements do not in


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any way hold the Corporation /GoJK liable to the IPP or any Contractor in any manner whatsoever and shall be without prejudice to the rights of GoJK/ Corporation hereunder.

5.1.1 Commercial Operation Date (COD)

The IPP shall achieve COD as specified by the Corporation in TEC document.

5.1.2 Incentives for Early Commercial Operation of the Project:- If COD is achieved earlier than scheduled COD, IPP will not be required to provide free power/Royalty up to the scheduled COD from the actual COD.

5.1.3 Monitoring and Supervision of the Project

i) The IPP shall furnish to the Corporation quarterly progress reports of actual progress of the Construction Works comprised in the Project and shall give all such other relevant information as may be required by the Corporation.

ii) During the Construction Period, the IPP shall provide videography to Corporation every calendar quarter, covering the construction of the Project in that quarter. Such video recording shall be provided no later than fifteen days after the close of each quarter.

iii) Corporation may inspect the Construction Works and the Project.

The IPP shall, at all times, afford access to the Site to the authorised representatives of the Corporation and to the persons duly authorised by any Government agency having jurisdiction over the Project, including those concerned with safety, security or environmental protection to inspect the Project Site and to investigate any matter within their authority and upon reasonable notice, the IPP shall provide to such persons reasonable assistance/necessary information to carry out their respective duties and functions with minimum disruption to the construction, operation and maintenance of the Project consistent with the purpose for which such persons have gained such access to the Site.

5.1.4 Rights and Title Over the Site

i) The IPP shall have exclusive rights to the use of the Site in accordance with the provisions of the Agreement and for this purpose it may regulate the entry and use of the Project by third parties.

ii) The IPP shall not sublet any part or the whole of the Site save and

except as may be expressly set forth in the Agreement, provided however that nothing contained herein shall be construed or interpreted as restricting the right of the IPP to appoint contractors for the performance of its obligations hereunder including for operation and maintenance of all or any part of the Project including the Project Facilities.

5.1.5 Execution of Upstream and Downstream Projects.


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The IPP shall not have any objection to the development of upstream or downstream hydro power projects including development / diversion of water for irrigation, flood control/ water supply etc. projects being/ to be developed by the GoJK or any of its agencies, provided however, the GoJK will ensure uninterrupted flow of water discharge to the extent as must have been earmarked and indicated in the design discharge by the GoJK and/or as may be permitted under clearances to be issued by the concerned Government departments..

5.1.6 Rehabilitation and Resettlement Plan

The IPP shall execute the Rehabilitation and Resettlement Plan prepared in consultation with the GoJK, duly vetted by the latter at its own cost and the cost so incurred shall form part of the Project Cost.

5.1.7 Safety Measures

The IPP shall ensure proper safety measures during implementation of the Project including any geological study, construction and testing at the Site. The Corporation shall have the right to institute an appropriate mechanism to ensure compliance by the IPP in this regard.

5.1.8 Alternative Facilities In case any existing facilities including, but not limited to, irrigation systems, water supplies, roads, bridges, buildings, communication system(s) power systems and water mills are adversely affected because of the implementation of the Project, the IPP shall be responsible and bear the cost of for taking remedial measures to mitigate such adverse effects. The cost of the above remedial measures shall become part of the Project Cost. Such facilities shall be as mutually identified and agreed upon between the IPP and the Corporation. The IPP shall not interfere with any of the existing facilities till an alternate facility, as identified, is created.

5.1.9 Usage of Forest Land The IPP shall ensure that the land is used only for the Project. Use of Forest land, in case other alternative land is not available, shall be allowed strictly as per provisions of J&K Forest Conservation Act, 1997 and the IPP shall have to fulfill all the conditions mentioned in the order issued by the competent authority in this behalf before taking up the work. However, use of Forest land under Wildlife Protected areas shall be as per J&K Wildlife (Protection) Act, 2002 and Hon’ble Supreme Court orders in this behalf.

5.1.10 Compensatory Afforestation The IPP shall pay to the GOJK the cost of raising compensatory afforestation and its maintenance for a period and the extent of area, as may be determined by Ministry of Environment and Forests (MoEF), GoI and or the concerned department of the GoJK.

5.1.11 Environment Clearance


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The IPP shall be liable to obtain Environment clearance as required under the Environment (Protection) Act, 1986 and as per Environment Impact Assessment (EIA) Notification dated 14th Sept. 2006.

5.1.12 Catchment Area Treatment Plans The IPP shall make suitable financial provisions in the Project Cost for the catchment area treatment plans, as may be determined by the concerned department of the GoJK and if need be by MoEF, GOI. The cost involved on this account shall be paid by the IPP to the Forest Department of the GoJK as per Forest and Environment Clearance accorded by the GoI/and or the concerned department of the GoJK.

5.1.13 Ensuring Flow of Water

The IPP shall ensure such minimum flow of water immediately downstream of the weir/barrage/dam for downstream requirements as specified in the environmental clearance issued by the GoJK or as may be directed by any other department of the GoJK or SPCB.

5.1.14 Protection of Fish culture The IPP shall take appropriate steps, as may be required, for the protection of fish fauna in the project area. The IPP shall enter into a separate agreement with the Fisheries Department in this regard on case to case basis.

5.1.15 Environment Impact Assessment

The IPP shall be liable to carry out Environmental Impact Assessment as required under the Environmental (Protection) Act, 1986 through consultant(s) drawn from a reputed organization and obtain the consent of State Pollution Control Board (SPCB) under the Water (Prevention and Control of Pollution) Act, 1974 or any other environment law(s) as may be applicable.

5.1.16 Fishing, Recreational and Navigational Rights The fishing, recreational and navigational rights in the river, water, channels, reservoirs, lakes shall remain vested with the Government/Fisheries Deptt. subject only to such restrictions as may be necessary for the operational requirements, safety and security of the Project. Opening and closing of the water body shall be undertaken with prior information and in close coordination with the Fisheries Department.

5.1.17 Maintaining Ecological Balance The IPP shall be responsible for maintaining the ecological balance by preventing deforestation, water pollution and defacement of natural landscape in the vicinity of Works. The IPP shall take all reasonable measures to prevent any, unnecessary destruction, scarring or defacement of the natural surroundings in the vicinity of the Works.

5.1.18 Dumping of Excavated Material


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The IPP shall ensure that the material excavated from the site shall be dumped in the area duly approved by the Corporation.

5.1.19 Use of Facilities Subject to availability, security, safety, law, order, and operational factors being met, the IPP shall permit free use, by the GoJK and the general public, of all service roads constructed and maintained by it for the Project after the project has been commissioned.

5.1.20 Trees in the Land transferred to the IPP The IPP shall pay compensation of the trees, on the Forest land, which are to be felled or damaged during the execution of the project as per orders to be issued by the Competent Authority. Trees shall be felled/removed by the Forest Department/J&K State Forest Corporation and IPP shall not be entitled to its sale proceeds. Regarding felling of trees on the other GoJK lands and private land the same shall be as per the existing law in vogue. However, GoJK shall provide necessary assistance to the IPP in obtaining the permission of competent authority for removal of trees on the acquired land.

5.1.21 Archaeological Findings, Treasures etc.

All fossils, coins, articles of value or antiquity and structures and other remains or things of geological or archaeological interest discovered on the Site shall be deemed to be the absolute property of the GoJK. The IPP shall take reasonable precautions to prevent his workmen or any other persons from damaging any such article or thing. The IPP shall arrange to hand over the same to the GoJK free of cost, provided that, in case any precious or semi-precious material is located, the IPP shall inform the GoJK immediately and abide by the directives of the GoJK which would stand communicated within a period of two (2) months from the date of receipt of such intimation from the IPP.

5.1.22 Labour and compliance with labour /Industrial and other laws. IPP shall at its expenses, ensure due compliance with all applicable and governing laws industrial and labour laws and regulations and by-laws both of the GoI and GoJK and all other local authorities and shall keep the GoJK indemnified in respect thereof. The IPP shall ensure due compliance with the provisions of the minimum wages Act, payment of wages Act, contract labour (regulations and abolition) Act, workman’s compensation Act, EPF Act and other labour/industrial laws in force.

5.1.23 Promoter’s Equity in the IPP


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The IPP shall be permitted to incorporate a new public/private limited IPP for the implementation of the Project with its Registered Office within Jammu & Kashmir. All rights and obligations under this Agreement shall thereafter be transferred to the new IPP. Unless otherwise permitted by the Corporation, the aggregate equity contribution of the IPP/promoters of the allottee IPP/Consortium to which the Project was initially allotted shall not be less than 51 % (fifty one percent) during the Construction Period and until 2 (two) years following the commencement of Commercial Operations.

5.1.24 Surrender of allotment. The IPP may surrender the allotment if on formulation of the DPR within the stipulated time-frame, it establishes, to the entire satisfaction of JKSPDCL, that the project is techno-economically unviable. On such surrender, the bank guarantee provided by the IPP in lieu of upfront premium as well as the performance guarantee would be released and the premium amount would be refunded to the IPP.

5.2 Obligations of the GoJK and Corporation 5.2.1 Assistance in Obtaining Clearances

The Corporation shall assist the IPP in obtaining the various statutory clearances and approvals required for the implementation of the Project, from various competent authorities of the GoJK /GoI on best effort basis. The responsibility of obtaining these approvals/clearances shall, however, rest with the IPP only.

5.2.2 Use of materials

The GOJK shall permit the IPP, in accordance with the Law to collect and use boulders, stones, shingles, limestone and other building materials, except precious and semi-precious materials, from the river beds, and/or from the land acquired for or transferred to or leased out the IPP for the Project on payment of royalty in accordance with the GOJK rules/rates in force from time to time. However, IPP shall obtain NOC from Fisheries Department for collection of such materials in all the cases and NOC from Forest Department in case of collection of such material from river beds falling in forest areas.

5.2.3 Lease of land for Permanent Works Upon the request of the IPP and subject to the provisions of laws in force, GOJK shall, on such terms and conditions and rates prescribed by the GOJK from time to time, provide for, on a long term lease, for maximum period of 40 years the GOJK land required for Permanent Works, as may be necessary for the construction, operation and maintenance of the Project. The private land will be acquired by the GOJK and then leased out to a non state subject IPP in accordance with Law on the subject.

5.2.4 Lease of Land for Temporary Works

Upon the request of the IPP and subject to the provisions of laws in force, the GOJK shall provide, on such terms and conditions and rates as may be


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prescribed by the GOJK from time to time, on a short term lease for a maximum period of not exceeding 7 years, such GOJK land required for Temporary Works, as is considered reasonably necessary by the GOJK. In case the IPP desires, in addition to GOJK land, private land may also be acquired by the GOJK and leased out to the IPP on a short term basis for a maximum period of not exceeding 7 years for temporary works, as is considered reasonable/ necessary by the Corporation.

5.2.5 Acquisition of Land JKSPDC will take necessary action to acquire land and also lease the same, as per applicable law strictly as per component wise project requirement of the IPPs on payment of premium/rentals to be determined by the Government till the expiry of Concession Period.

5.2.6 Lease hold assignment The GOJK shall permit mortgaging of land acquired/diverted for the Project as per rules and laws in force in favour of the Lenders.

5.2.7 Upgradation of Roads and Bridges GOJK shall, at the request and cost of the IPP, construct, widen and strengthen such roads or bridges within the State of Jammu & Kashmir, as are considered reasonably necessary by the GOJK. The GOJK shall permit the IPP to construct roads, bridges, culverts as considered necessary for the Project in the Project lands in consultation with State Public Works Department at the cost of the IPP. The GOJK/ Corporation may also construct roads, bridges, culverts as are considered reasonably necessary by the GOJK in the interest of the Project on a case-to-case basis.

5.2.8 Evacuation of Power

The Corporation shall provide necessary assistance to the IPP in tying up the transmission system for evacuation of power from the Project out of Jammu & Kashmir through the transmission system of the J&KPDD, Power Grid Corporation of India Limited (PGCIL) or any other such utility(ies).

5.2.9 Levies, Taxes and Charges i. No entry tax will be levied by the State Government on power

generation, transmission equipment and building material and construction equipment for Power projects awarded under this policy.

ii. Exemption from Income tax on account of income accruing from

micro-hydel power projects shall be governed as per the Government of India policy in vogue.

iii. IPP may pursue CDM benefits from the project at its own risk and responsibility. Sharing of the CDM benefits between IPP and JKSPDCL will be as per CERC/SERC regulations.

iv. Projects awarded under this policy shall be exempted from water usage charges imposed under the “J&K Water Resource Regulation


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and Management Act 2010” for the first 10 years of operation reckoned from Scheduled Commercial Operation Date.

v. The projects up to 25 MW can avail incentives from MNRE as per the National Policy.

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ARTICLE 6 PLANT OPERATION AND MAINTENANCE

6.1 Subject to the Provisions of the Agreement, the IPP shall operate and

maintain, and if required, effect improvement (within the overall scope of the Project Implementation) in the Project in accordance with: i) Prudent Utility Practices; ii) All applicable laws and directive; iii) The manuals, instructions, manufacturers' guidelines supplied by

construction contractors, manufacturers of equipments/ suppliers etc.; iv) The Grid Code; v) Dispatch instructions; and vi) Rated capacity subject to normal derating /deterioration.

6.2 The Project Unit(s) shall be capable of meeting the load dispatch requirements. The IPP shall follow the directive of the Control Centre/ NRLDC in the interest of integrated grid operation.

6.3 Any Dispute with reference to the directive of the Control Centre /NRLDC

shall be referred to JKSERC whose decision in such a matter shall be final. Pending the decision of JKSERC, Control Centre's /NRLDC's directives shall prevail in the interest of smooth operation of the grid.

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ARTICLE 7 REPRESENTATI0NS AND WARRANTIES 7.1 Representations and Warranties of the IPP

The IPP represents and warrants that as of the date hereof: a. The IPP is a IPP duly registered and validly existing under the laws of

India and has all requisite legal power and authority to execute this Agreement and carry out the terms, conditions and provisions hereof;

b. It has the financial/technical standing and capacity to undertake the

Project;

c. It is subject to civil and commercial laws of India with respect to this Agreement and it hereby expressly and irrevocably waives any immunity in any jurisdiction in respect thereof;

d. It has complied with all Applicable Laws and has not been subject to

any fines, penalties, injunctive relief or any other civil or criminal liabilities which in the aggregate have or may have Material Adverse Effect on its financial condition or its ability to perform its obligations and duties under this Agreement;

e. There are no actions, suits or proceedings pending or, to the IPP's

knowledge, threatened, against or affecting the IPP before any Court or administrative body or arbitral tribunal that might materially or adversely affect the ability of the IPP to meet and carry out its obligations under this Agreement;

f. The IPP has duly paid all rents, royalties and all public demands,

including provident fund dues, gratuity dues, employees State Insurance dues, income tax, sales tax, Corporation tax and all other taxes and revenues due and outstanding and that no attachments or warrants have been served on the IPP in respect of sales tax, income tax, GOJK / GOI revenue and other taxes;

g. The execution and delivery by the IPP of this Agreement has been

duly authorised by all requisite corporate or partnership action, and will not contravene any provision of, or constitute a default under any other agreement or instrument to which it is a party or by which it or its property may be bound; and

h. Representations or warranties by the IPP contained herein or in any

other document furnished by it to any Government Agency in relation to clearances and approvals shall not contain any untrue statement of


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material fact. The IPP shall not omit to state a material fact necessary to make such representation or warranty not misleading.

7.2 Representations and Warranties of the Corporation.

a. The Corporation is validly existing under the Laws of India and has all requisite legal power and authority to execute this Agreement and to carry out the terms, conditions and provisions hereof; and

b. The execution and delivery of this Agreement by the Corporation does not violate the provision of any existing law or notification or regulation or order or decree of any court, government authority, or of agency or of any contract, undertaking or agreement, to which the Corporation is a party or which is binding on Corporation and any of the above does not result in the imposition or creation of any lien, charge or encumbrance on the assets of the IPP or part thereof.

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ARTICLE 8 UNDERTAKINGS 8.1 The IPP hereby covenants to and agrees with the Corporation to:

a. Make all efforts to collect required information and file necessary applications to the concerned authorities for obtaining the statutory clearances and approvals.

b. Use all reasonable efforts to obtain financing for construction and

operation of the Project as contemplated in this Agreement;

c. Use all reasonable efforts to negotiate and execute financing documents in, accordance with the terms and provisions of this Agreement;

d. Work with and co-operate in good faith with the Corporation with

respect to all of the obligations and rights hereunder;

e. Use all reasonable efforts to obtain all GOJK/Corporation Authorisations / Applicable Permits;

f. Engage advisors, representatives and experts as are experienced in

the development, construction and financing of power stations similar to the Project;

g. Design, construct and complete the Project in a good workman-like

manner, 'only with the materials and equipment that are new and of international utility-grade quality, in such a manner that useful life of the Project will be at least equal to the Agreement period and in accordance with

i. All applicable laws, rules, regulations, permits and licenses; and ii. Sound engineering and construction practices, and prudent utility

practices.

h. Engage contractors of repute that are recognized nationally or at state level and that have significant experience in the engineering, procurement and construction of hydel power generating stations of similar capacities;

i. Operate and maintain the Project in accordance with the dispatch

instructions and prudent utility practices;

j. Provide Government / Corporation with copies of all publicly filed financial statements and reports;


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k. Pay all amounts due to the Government (including penalty) in

accordance with the provisions of this Agreement;

l. The IPP shall be responsible for laying lines for connectivity to the nearest grid sub-station at the appropriate voltage which will normally be 132 KV or 33 KV depending on the capacity of the power station and distance from the Power station to the Grid substation. On specific request from the IPP, the J&K PDD will carry out the implementation of evacuation facilities at charges to be mutually negotiated.

m. At the end of the Agreement period, transfer the Project in good , working condition to the Corporation as per provisions of this Agreement;

And

n. Not to transfer/dispose off or otherwise alienate any asset of the IPP

without prior approval of the Corporation.

8.2 Undertakings of the Corporation The Corporation hereby covenants to and agrees with the IPP to:

a. Provide such assistance and support as the IPP may reasonably require in identifying and preparing the applications for GOJK authorisations and in interfacing with Government Authorities in connection with obtaining the same for the construction, completion and operation of the Project;

b. Provide adequate construction power subject to availability, to the Project

work site at the cost of the IPP. The Corporation shall not be liable to pay any damages/compensation to the IPP in the event of non-supply of construction power beyond J&KPDD's control.

c. Make arrangements for establishing (by themselves/other agencies) suitable

transmission system for transmission of power beyond the interconnection point at least three months prior to the scheduled COD;

And

d. Work with and co-operate in good faith with the IPP with respect to all of the

IPP's obligations and rights hereunder.

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ARTICLE 9

FORCE MAJEURE

9.1 In the event a Party is rendered unable to perform any obligations required

to be performed by it under the Agreement by Force Majeure, the particular

obligations shall, upon notification to the other Party, be suspended for the

period of Force Majeure.

9.2 Subject to Section 9.6, Force Majeure shall mean any event or

circumstances or combination of events or circumstances that wholly or

partly prevents or unavoidably delays any Party in the performance of its

obligations under the Agreement, but only if and to the extent that such

events and circumstances are not within the reasonable control, directly or

indirectly, of the affected Party and could not have been avoided even if the

affected Party had taken reasonable care. Such events may include acts of

the Government/GOI either in its sovereign or its contractual capacity, war,

civil war, quarantine restrictions, freight embargoes, radioactivity and

earthquakes to the extent they or their consequences, satisfy the above

requirements.

9.3 Upon the occurrence of an event of Force Majeure, the Party claiming that

it has been rendered unable to perform any of its material obligations

under the Agreement, shall notify the other Party in writing within five (5)

days of the commencement thereof giving the particulars and satisfactory

evidence in support of its claim. Upon termination of such event of Force

Majeure, the- affected Party shall, within twenty four (24) hours of its

termination, intimate the other Party of such termination.

9.4 Time for performance of the relative obligations suspended by Force

Majeure shall then stand extended by the period of delay which is directly

attributable to Force Majeure. The Party giving, such notice shall be

excused from timely performance of its obligations under the Agreement,

for so long as the relevant event of Force Majeure continues and to the

extent that such Party's performance is prevented, hindered or delayed,

provided the Party or Parties affected by the event, of Force Majeure shall

use reasonable efforts to mitigate the effect thereof upon its performance

of the obligations under the Agreement.

9.5 Delay or non-performance by a Party hereto caused by the occurrence of

an event of Force Majeure shall not:

a) constitute a default or breach of the Agreement; and b) give rise to any claim for damages or additional cost of expenses occasioned thereby.


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9.6 Force Majeure shall expressly not include the following, except to the extent

resulting from a ", Force Majeure:

"a) unavailability, late delivery or changes in cost of plant, machinery,

equipment, materials, spare parts, fuel or consumables for the Project; b) a delay in the performance by any contractor(s); c) non-performance resulting from normal wear and tear typically

experienced in power generation materials and equipment; and d) non-performance caused by, or connected with, non-performing Party's

(i) negligent or intentional acts, errors or omissions, (ii) failure to comply with any of the Laws of India, and or the Government (iii) breach of, or default under the Agreement

9.7 PROLONGED FORCE MAJEURE

In the event of a Force Majeure event occurring after the COD of the

project and if such event continues beyond one year from date of its

occurrence or such other period as may be mutually agreed to by the

Parties, the matter shall be resolved by the Parties in mutual consultation

with each other.

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ARTICLE 10 EVENTS OF DEFAULT 10.1 Corporation Event of Default

The occurrence of and continuation of any of the following events shall constitute " Corporation Event of Default" unless such an event occurs as a result of a IPP default, as defined in Clause 10.2: i. Corporation repudiates this Agreement “or otherwise” evidences an

intention not to perform its obligations under, or to be bound by, this Agreement;

ii. The material breach by Corporation of any term of this Agreement

other than -with respect to sub-clause (i) above;

10.2 IPP Event of Default The occurrence of and continuation of any of the following events shall constitute "IPP Event of Default" unless such an event occurs as a result of a Corporation default, as defined in Clause 10.1: i) The IPP repudiates this Agreement or otherwise evidences an

intention not to perform its obligations under, or to be bound by, this Agreement;

ii) The IPP fails to make payments in respect of its obligations under the

Agreement for more than 90 days;

iii) The IPP assigns all or part of its rights or transfers its obligations under this Agreement in violation of any of the provisions of this Agreement;

iv) The IPP abandons the implementation of the Project including

withdrawing all, or a substantial number of personnel from the Site, for reasons other than Force Majeure for a continuous period of more than ninety days, provided that the IPP shall not be deemed to have abandoned the Project so long as in the reasonable opinion of the Corporation, it is using its best efforts to regain control or to restart construction or operation of the Project as the case may be;

v) The transfer (a) pursuant to law of either the IPP's rights and/or its

obligations under this Agreement or all or a substantial portion of the IPP's assets or undertakings; or (b) the dissolution of the IPP pursuant to law including, by way of merger or consolidation, liquidation and reconstitution or reorganisation unless (i) the transferee or successor of the IPP expressly assumes the obligations of the IPP under this Agreement and (ii) the transferee or successor in interest of the IPP has a credit worthiness, in the reasonable opinion of the Corporation, at least equal to that of the IPP and , is otherwise fully capable of performing obligations of the IPP under this Agreement; or


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vi) The material breach by the IPP of any terms of this Agreement other than with respect to sub-clauses (i) and (ii) of Clause 10.2(v) above.

vii) The IPP fails to maintain the project and its assets as per the terms

and the conditions of this agreement especially clause 2.4 (b).

10.3 Cure Period

i) Upon the occurrence of a Default by a Party (Defaulting Party) pursuant to clauses 10.1 or 10.2, the other Party (Non-Defaulting Party) has the right to issue a Notice of Default specifying in reasonable detail the Event of Default giving rise to the Notice of Default.

ii) On receipt of the Notice of Default, the Defaulting Party shall take

immediate steps to cure such a default within a period of ninety days from the receipt of the Notice of Default with due notice to the Non-defaulting Party of steps taken by it to cure the above default.

iii) In the event the reasons leading to the Default have been cured to

the reasonable satisfaction of the Non-defaulting Party, the Notice of Default shall cease to have any effect.

iv) In the event the Defaulting Party is unable to cure the Default to the

reasonable satisfaction of the Non-defaulting Party within the period specified in sub-clause 10.3 (iii) above, the provisions of Clause 10.4 or 10.5 shall apply, as the case may be.

10.4 Remedies Available to the IPP

Upon the occurrence and continuation of a Corporation Event of Default under Clause 10.1 above, and the failure by the Corporation to cure such a default within the applicable cure periods, if any specified in Clause 10.3, the IPP shall have the right to terminate this Agreement by notice to the Corporation in accordance with the procedures set forth in Article 11.

10.5 Remedies Available to the Corporation

Upon the occurrence and continuation of a IPP Event of Default under Clause 10.2 above, and the failure by the IPP to cure such a default within the applicable cure periods, if any specified in Clause 10.3, the Corporation shall have the right to terminate this Agreement by notice to the IPP in accordance with the procedures set forth in Article 11.

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ARTICLE 11 TERMINATION AND TAKING OVER OF THE PROJECT 11.1 Termination 11.1.1 Notice of Termination:

This Agreement may be terminated on serving a thirty days notice (Notice of Termination) by: i) The IPP, in case of a Corporation Event of Default pursuant to

Clause 10.4; ii) The Corporation, in case of a IPP Event of Default pursuant to

Clause 10.5;

iii) The Corporation, in case the IPP fails to reach the milestones as specified in RFQ Bid Document

iv) Either Party, notwithstanding anything contained in Article 9, if either

Party is unable to perform any obligations required to be performed under this Agreement due to Force Majeure for a continuous period of 6 months; and

v) The IPP, in the event of enactment of any law or regulation or any

subsequent act of any Government authority which makes the performance of this agreement, impossible for any Party.

11.1.2 On the expiry of the Notice of Termination, the party which served the

Notice of Termination shall be entitled to terminate this Agreement under intimation to the other Party, unless the event leading to the Notice of Termination has been rectified or complied with to the satisfaction of the Party which issued the Notice of Termination.

11.2 Termination of the Agreement shall be without prejudice to the accrued

rights and liabilities of the Parties, as on the date of the termination, unless waived in writing by the Parties.

11.3 In the event that this Agreement is terminated prior to the start of the

construction of the Project, all rights of the IPP shall revert back to the Corporation.

11.4 Buy Out and Take Over 11.4.1 Buyout Events

For the purpose of this Agreement, a Buyout Event, shall be the occurrence of the termination as per Clause 11.1.2 as a result of the Notice of Termination issued pursuant to Clause 11.1.1 (i), (ii), (iv), and (v).


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11.4.2 Buyout Price

As a result of the Notice of Termination issued pursuant to Clause 11.1.1 (i), (ii), (iv), or (v), the buyout price for the Project shall be as under: i) If the Buyout event occurs after the commencement of construction

but prior to Commercial Operation of the Project, the Corporation shall take over the project from the IPP, for a consideration equivalent to 75% of the Realisable Value of Assets, or the Historical Depreciated Cost of the Project, whichever is lower, but at least equivalent to the Debt incurred and actually utilised on the Project by the IPP and outstanding on the Date of Termination. The Buyout Price shall be determined by an independent registered valuation firm / valuer appointed by the Govt.

ii) If the Buyout event occurs subsequent to Commercial Operation of the

Project upto a period of 10 years, the Corporation shall take over the project from the IPP, for a consideration equivalent to the Realisable Value of Assets, or the Historical Depreciated Cost of the Project, whichever is lower, but at least equivalent to the Debt incurred and actually utilised on the Project by the IPP and outstanding on the Date of Termination. The Buyout Price shall be determined by an independent registered valuation firm / valuer appointed by the Corporation.

11.4.3 Take Over of the Project As a result of the Notice of Termination issued pursuant to Clause 11.1.1 (iii), the Project shall be taken over by the Corporation and the Agreement shall stand terminated; the Corporation shall not be liable to pay any compensation thereof to the IPP.

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ARTICLE 12

RESOLUTION OF DISPUTES 12.1 Good Faith Negotiations

In the event of a dispute, disagreement or difference (a "Dispute"), arising out of or relating to the Agreement between the parties in respect of which a procedure for the resolution of the Dispute is not otherwise provided for in the Agreement, the following provisions shall apply: a. In case of a dispute, both the parties will attempt in good faith,

negotiate and I, use their best endeavors at all times to resolve the dispute mutually. If disputes cannot be settled mutually, they shall be first adjudicated by a Dispute Adjudication Committee (DAC). The Corporation and the IPP shall appoint the DAC comprising of 3 suitably qualified personnel within 20 working days of receipt of written notice from either party stating the material particulars of the dispute. Each party shall nominate one representative of the DAC. The Corporation and the IPP shall mutually agree upon and appoint the 3rd member who shall act as chairman of DAC. In case agreement is not arrived on the third nominee same shall be appointed by J&KSERC in consultation with the representatives of the two parties.

b. Either party shall give to the DAC a written notice setting out the material particulars of the Disputes and requiring DAC to meet personally at Srinagar/Jammu or at any other mutually agreed place. The DAC shall give speaking and reasoned award within sixty (60) working days of the date of receipt of such notice by the DAC strictly in accordance with the terms and conditions of the Agreement.

c. If the dispute is not resolved as evidenced by the terms of the settlement being , reduced to writing and signed by the DAC within sixty (60) working days after the date of receipt of the Notice described in Clause 12.1(b), then the Provisions of Clause 12.2 shall apply, unless the above period is mutually extended.

d. Neither Party will approach the arbitrator or the court of law prior to issuance of the award by the DAC.

e. Each party shall bear the costs or appointment of its member in tile DAC. The terms of remuneration of the Chairman DAC shall be mutually agreed upon by the Corporation and the IPP when agreeing to the terms of appointment of the Chairman DAC. The Corporation and the IPP shall each pay one half or the agreed remuneration.


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12.2 The Agreement shall be subject to the jurisdiction of competent courts of

Jammu & Kashmir. 12.3 No Arbitration of Buyout Price

Notwithstanding the generality of the provisions of Clause 12.1, 12.2 and 12.3, any determination of the Buyout Price as described in Article 11 shall be made exclusively by the independent valuer in accordance with Clause 11.4, and neither Party shall have the right to cause any such determination to be resolved by arbitration or otherwise.

12.4 Not withstanding the existence of any dispute or difference referred, the

parties shall continue to perform their respective duties/obligations under the Agreement

12.5 For all such issues as are not specially covered under the terms of the

Agreement, same shall also be referred to above specified DAC, which shall settle the same in accordance with the J&K State Arbitration & Reconciliation Act 1997.

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ARTICLE 13

ADDRESSES AND ADDRESSEES 13.1 Except as otherwise expressly provided in the Agreement, all notices and

other communications which are required or permitted hereunder shall be in writing and considered as adequately served if delivered personally (under acknowledgement) or sent by registered or certified mail, telefax, telex or telegram addressed as follows:

(a) If to the Corporation:

___________________________________________ ___________________________________________ ___________________________________________ ___________________________________________

(b) If to the Government:_________________________

___________________________________________

(c) If to the IPP: _______________________________

___________________________________________ 13.2 Any Party may by notice of at least fifteen (15) days to the other Party,

change the addresses and/or addressees to which such notices and communications are to be delivered or mailed.

13.3 The Party sending the notice shall also send a copy to the designated officer,

if any, of the Party specified in respect of that notice in the Agreement.

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ARTICLE 14

MISCELLANEOUS 14.1 Governing Law

The rights and obligations of the Parties under or pursuant to the Agreement shall be governed by and construed in accordance with the Laws applicable in the State of J&K.

14.2 Headings The Headings contained in the Agreement are used solely for convenience and shall not be construed to assign any meaning to the Agreement nor shall such headings be used in any manner to aid in the construing of the Agreement.

14.3 Language The language of this Agreement shall be English. All notices required to be given by one Party to the other Party and all other communications, documentation and proceedings which are in any way relevant to the Agreement shall be in writing and in English language.

14.4 Amendments This Agreement can not be amended except by written consent of both the parties.

14.5 Relationship of the Parties This Agreement shall not be interpreted or construed or create an association, joint venture or partnership between the parties or to impose any partnership obligation or right upon either Party. Neither Party shall have any right, power or authority to enter into any agreement or undertaking for, or act on behalf of, or to act as or be an agent or representative of, or to otherwise bind, the other Party.

14.6 Third Parties This Agreement is intended solely for the benefit of the parties hereto. Nothing in this Agreement shall be construed to create any duty, to standard of care with reference to, or any liability any person not a party to this Agreement.

14.7 No Waiver

a. No waiver by either Party of any default by other Party in the observance and performance of any provision of or obligations of or under the Agreement:


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i. shall operate or be construed as a waiver of any other or subsequent default hereof or of other provisions of or obligations under the Agreement.

ii. shall be effect unless duly executed in writing by a duly

authorized representative of such Party; and

iii. shall affect the validity or enforceability of the Agreement in an manner.

b. Neither the failure by either Party to insist on any occasion upon the

performance of the terms, conditions and provisions of the Agreement or any obligation there under nor time or other indulgence granted by a Party to the other Party shall be treated or deemed as waiver of such breach or acceptance of any variation or the relinquishment of any such right hereunder.

14.8 Exclusion of Implied Warranties

The Agreement expressly excludes any warranty, condition or other undertaking implied at law or by custom or otherwise arising out of any other agreement between the Parties or any representation by either Party not contained in a binding legal agreement executed by both Parties.

14.9 Counterparts The Agreement may be executed in two (2) counterparts, each of which when executed and delivered shall constitute an original of the Agreement.

14.10 Assignment The Agreement shall not be assigned by either Party except by mutual consent of the Parties in writing.

Notwithstanding the foregoing for the purpose of financing the Project, the IPP may assign or create security over its rights and interests under or pursuant to the Agreement. The holder of any security created under this Section shall not be prevented or impeded by the Corporation from enforcing such security in accordance with its terms, including, without limitation, exercising any right it may have to reassign, the Agreement to a new qualified owner or operator of the Project. The Corporation shall execute all such consents to assignment and/or acknowledgement of any secul1fy created in connection with this Section as are reasonably requested by the IPP to give effect to the foregoing.

14.11 Indemnity

The IPP shall be fully responsible for any damage or loss arising out of the construction, operation or maintenance of the Project to any property or persons and also undertakes to indemnify the Corporation on such account.

14.12 Severability


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If for any reason whatever any provision of the Agreement is or becomes invalid, illegal or unenforceable or is declared by any court of competent jurisdiction or any other instrumentality to be invalid, illegal or unenforceable, the validity, legality or, enforceability of the remaining provisions shall not be affected in any manner, and the Parties will negotiate in good faith with a view to agreeing one or more provisions which may be substituted for such invalid, unenforceable or illegal provisions, as nearly as is practicable to such invalid, illegal or unenforceable provision. Failure to agree upon any such provisions shall not be subject to dispute resolution under the Agreement or otherwise.

14.13 Survival The termination or expiry of this Agreement shall not affect the accrued rights, obligations and liabilities of either Party under this Agreement, nor shall it affect any continuing obligations which this Agreement provides, whether expressly or by necessary implication.

14.14 Confidentiality a. Each of the Parties shall hold in confidence the agreements relating

to the Project and all documents and other information, whether technical or commercial, which is of a confidential nature supplied to it by or on behalf of the other Party relating to the design, construction, insurance, operation, maintenance, management and financing of the Project and shall not, save as required by law or appropriate regulatory Authorities, the Lenders, investors in the IPP or by professional advisors of the Parties hereto or of the Lenders or investors as aforesaid, publish, otherwise disclose or use the same for its own purposes otherwise than as may be required to perform its obligations under this Agreement.

b. The provisions of paragraph (a) above shall not apply to:

i. any information in the public domain otherwise than by

breach of this Agreement;

ii. information in the possession of the receiving party thereof before divulgence as aforesaid, and which was not obtained under any obligation of confidentiality;

iii. information obtained from a third party who is free to

divulge the same, and which is not obtained under any obligation of confidentiality; and

iv. information relating to the Project after the Corporation

has acquired the Project from the IPP

Signed and Delivered by within named Jammu & Kashmir State Power Development Corporation by the hand of Shri______________ authorized person, in the presence of;


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1. 2.

In witness whereof the IPP has caused its Common Seal affixed hereto and to a duplicate thereof on the day, month and year herein above written in pursuant to the Resolution of its Board of Directors passed in that behalf on the _____day of ______in the presence of ______________________and _______________________ who have signed these presents in token thereof and ______________________________has countersigned the same in token thereof.

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ABBREVIATIONS

BOOT Build Own Operate Transfer

COD Commercial Operation Date. This would mean the date

on which the project begins commercial operation.

Concession Period Concession Period shall mean 35 years of operation of

the project by the IPP from scheduled COD.

CPSU Central Public Sector Undertaking

CSR Corporate Social Responsibility

CTU Central Transmission Utility

DPR Detailed Project Report

EIA Environment Impact Assessment

EMP Environment Management Plan

PFR Pre feasibility Report

GoJK Government of Jammu and Kashmir

GoI Government of India

HEP Hydro Electric Project

IA Implementation Agreement

ICB International Competitive Bidding

IPP Independent Power Producer

The IPPs would include any Private Investor such as

Private Ltd. Company/Public Ltd. Company/Public Sector

Undertakings/ Partnership concern/ Sole Proprietary/Co-

operative Society /State Governments other than J&K or

any other Government or non Government entity or their

joint ventures or consortiums.

JKSPDCL Jammu & Kashmir State Power Development Corporation

Limited

JKSERC J&K State Electricity Regulatory Commission

JKPDD Jammu & Kashmir Power Development Department

JV Joint Venture

LADF Local Area Development Fund

MoU Memorandum of Understanding

NHPC National Hydroelectric Power Corporation.

O&M Operation and Maintenance

PPA Power Purchase Agreement

R&R Resettlement and Rehabilitation

RFP Request for Proposal

RFQ Request for Qualification

SHP Small Hydro Power Project

SDU State Distribution Utility


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TEC Techno Economic Clearance

T&D Transmission and Distribution

TU Transmission Utility -JKPDD or its successor(s)

UI Unscheduled Interchanges

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