As DRC Takes Charge at MNRE, A Busy Period Beckons

The Ministry of New and Renewable Energy has finally set up the dispute resolution committee it promised earlier this month. Announced by the Power Minister Shri. R.K. Singh,  the commitee is tasked with the job of settling disputes that arise between government agencies and private sector players .

This committee is comprised of three former civil servants, MF Farooqui (former DOT Secretary/ Heavy Industry Secretary), Anil Swarup (former Coal Secretary/School Education Secretary) and A K Dubey (former Sports Secretary).

The commitee mechanism will covers all projects implemented through or SECI and NTPC.

“It is felt that there is need to erect a transparent, unbiased dispute resolution mechanism, consisting of an independent, transparent and unbiased DRC), for resolving the unforeseen disputes that may arise in implementation of contractual agreements and also for dealing with issues which are beyond the scope of contractual agreements between solar power developers/ wind power developers and SECI / NTPC,” an MNRE office order had said.

The DRC will examine all such cases referred to it, including the cases where the developer is not satisfied with the decision of SECI or NTPC and it decides to appeal after paying the required fee. The order said the recommendations of the DRC, along with the MNRE’s observations, will be placed before the new and renewable energy minister for final decision.

To arrive at any decision, the Committee will be free to interact with the relevant parties of the case and shall record their views. No lawyer shall be permitted to present the case before the DRC, the MNRE order added.

Issues that have come up earlier range from causes for delays in commissioning, issues around under production or over generation and the price for the same, besides the increasing difficulties in power evacuation, land acquisition and more.

Strangely enough, SECI and NTPC are probably a huge improvement over the problems developers face from government agencies, where discoms area primary culprit. Some state discoms are on record with payment delays running between 18 months to 24 months even, severely crimping csh flows and forward planning. State regulators have clearly failed to step up here, and the DRC move by the MNRE is a clear move to at least keep the central ministry’s reputation intact.

Quicker dispute resolution becomes especially relevant at a time when there has been a distinct slowdown in new capacity additions, notwithstanding claims to the contrary from the government. India is well set to actually miss its solar and wind targets for 2022, ith a high probability that those targets might even be extended to 2024 at this rate.