MNRE Offers Clarification on Dispute Resolution Mechanism Provisions

MNRE has offered clarification on a key provision under the operating guidelines of its Dispute Resolution Mechanism

The Ministry of New and Renewable Energy (MNRE) has offered clarification on a key provision under the operating guidelines of its Dispute Resolution Mechanism which has been devised to consider the unforeseen disputes between solar and wind power developers and SECl/ NTPC/ NHPC, beyond their contractual agreements.

The ministry has mentioned that as per its initial order, in the case where the Government upholds the appeal in toto, after taking into consideration the recommendations of Dispute Resolution Committee (DRC), and strikes down the SECI (and now NTPC/NHPC also) order, then the full amount of fee collected shall be refunded, provided the DRC makes a recommendation for the same and the Government passes a specific order to that effect. 

However, it has now been clarified that, if the number of days of time extension, allowed by Government after taking into consideration DRC’s recommendation, is less than the number of days of time extension claimed by the solar/ wind power developer, then the refund of fee shall be in proportion to the number of days allowed, viz-a-viz the total number of days claimed by the developer. 

Working:

DRC Fee Paid: Rs. 10 lakh

-Number of days of time extension claimed by developer: 100 days

-Number of days of time extension recommended by the DRC and agreed by the Government: 60 days 

-Fee which may be refunded – [(10,00,000 x 60)/(100)) = Rs 6,00,000]

And, for the cases wherein the decision of Government, after taking into consideration the recommendations of DRC, has already been conveyed to DRC or SECI/NTPC/NHPC, fee refund (if applicable) can be done on the basis of this clarification, without the necessity of DRC making a recommendation for the same and the Government passing a specific order to that effect. 

In September, MNRE had issued amendments to the guideline for the operation of its Dispute Resolution Mechanism. The key takeaway from the amendments was that NHPC had been formally included in all the key provisions of the DRM and DRC regulations.