Maharashtra State Electricity Distribution Company (MESDLC) has terminated the power distribution agreement with franchisee company GTL for Aurangabad for defaulting in making payments.
MESDCL and has asked the distribution franchisee GTL to handover possession of all infrastructure and records pertaining to Aurangabad divisions on November 17. MESDCL in its letter dated November 10 (copy available) to CTL has terminated the franchisee contract and has demanded immediate payment of outstanding dues amounting to Rs. 393.07 crore
GTL limited were appointed power distribution franchisee of two divisions under Aurangabad zone on 1st. May 2011 for a period of 15 years to improve the power distribution system. The franchisee was required to perform all statutory obligations and duties of MESDLC.As per contract agreement MESDCL was to raise weekly invoices and franchisee was supposed to make payment in one week.
GTL failed to make timely payments and the MESDCL against the invoices rose within agreed period or even thereafter despite repeated follow ups .MESDCL has claimed in letter that GTL failed to comply with the provisions of agreement and clear outstanding dues amounting to Rs. 151 crore despite allowing additional time.
MSEDCL issued specific notice of critical event of default on September 2 this year GTL failed to pay the outstanding dues of MSEDCL despite indulgence and opportunities given. As the franchisee failed to make payments preliminary termination notice was issued on September 17 this year.
As GTL failed to mitigate the consequences of event of default as per agreement MESDCL has terminated the contract at the sole risk of GTL to all cost and consequences..
MESDCL shall take over the charge of the complete business on November 17.GTL has been asked to handover the complete infrastructure and records.GTL has been asked to clear pending payments within 30 days otherwise amount shall be recovered from termination payments.
All India power Engineers Federation said that it is very clear that urban distribution franchisee has nothing to do with improvement it is simply a mechanism to privatize the profits which is not in the national interest. As far as losses are concerned AT & C losses can be better controlled & reduced within the frame work of public sector functioning with a professionally qualified & technically oriented management to guide the policy & with the condition that political interference in day to day working in avoided.
Shaliender Dubey Chairman AIPEF further said that in case of Agra power distribution franchisee CAG has raised serious objections on the way it has been franchised. As per CAG report submitted in March 2013, serious violations of norms were done in appointing consultant and awarding franchisee ignoring actual data of AT & C losses and ATR. CAG has pointed out that UPPCL has incurred a loss of Rs. 421.12 cr. during two years and shall incur additional loss of Rs. 4601.12 cr. in next 18 years of franchisee.