MEMORANDUM OF UNDERSTANDING BETWEEN MINISTRY OF POWER GOVERNMENT OF INDIA AND NORTH EASTERN ELECTRIC POWER CORPORATION LIMITED PART - I
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1 MEMORANDUM OF UNDERSTANDING BETWEEN MINISTRY OF POWER GOVERNMENT OF INDIA AND NORTH EASTERN ELECTRIC POWER CORPORATION LIMITED PART I MISSION AND OBJECTIVES OF Shri. Barkakati, CMD, NEEPCO signing MoD for with Shri Anil Razdan, Secretary (Power). NORTH EASTERN ELECTRIC POWER CORPORATION LIMITED A) MISSION: To harness the vast hydro & thermal power potential to produce pollution free and inexhaustible power through planned development of power generation projects. NEEPCO would playa significant role in the integrated and efficient development of hydroelectric and thentlal power in the Central Sector covering all aspects such as investigation, planning, design, construction, operation and maintenance ofhydroelectric and thermal proj~ts which in tum would effectively promote the development of the nation as a whole.
2 " B) OBJECTIVE: For fulfillment ofits mission, NEEPCO has set the following objectives for the year commensurate with the aims, programmes and policies of the government evolved from time to time: ) To execute ongoing hydro/thelmal projects as per targets set, so as to achieve commissioning of such projects as per schedule or ahead of schedule. PART II EXERCISE OFENHANCED AUTONOMYAND DELEGATION OF FINANCIAL POWERS Enhanced delegation ofpowers given to MOU signing companies including those which may be extended to such companies during shall be exercisable by NEEPCO. ) To ensure optimum utilization of installed capacity so as to achieve maximum generation, optimum machine availability and high Plant Load Factor. 3) To undertake execution of new hydro/thermal schemes. 4) To make full efforts in the realization ofoutstanding dues from the beneficiaries in order to bring down the sundry debts. 5) To make efforts to evolve appropriate technology for accelerating the hydro/thelmal development. 6) To undertake timely renovation & modernization ofexisting old hydro and thermal plants. 7) To improve the Quality Management System, NEEPCO is already registered as an ISO: Company. NEEPCO has also been accredited with OHSAS 800 for occupational health & safety risk management system and ISO 400 for environmental management system. 8) To complete DPR of new schemes for hydro/thelmal projects as per schedule or ahead ofschedule as and when entmsted by Central Electricity Authority (CEA). 3
3 . _.'~~ PART III PERFORMANACE EVALUATION PARAMETERS AND TARGETS Performance Param~ters & their Weightages (Year 00809) Is!. Performance Indicator Unit WI. I Performance Rating BE RE BE IN( STATIC FINANCIAL PARAMETERS: a. Financial Performance Indicators i) Gross Margin/Gross Block % ii) Net Profit/Net Worth % iii) Gross Profit/Capital Employed * % h. Financial Indicators Size i) Gross Margin" (Rs. Crs.) ii) Gross Sales (Rs. Crs.) c. Financial ReturnsLabour. ProductivitJ' and Total Factor Productivity i) PBDlTrrotal Employment * % ii) Added Value / Gross Sales' % Sub Total 50. DY. AMIC PARAMETERS a) Projects Implementation 30 Details as per AnnexureI attached SI. Performance Indicator Unit WI. Performance Rating BE RE BE No b) QualitJ' Certifications i) Obtaining certification ISO Mar'09 Mar' (Quality), 400 (Environment) & 800 (Safety) for Doyang and Ranaganadi H.E.Project ii) Obtaining certification for ISO.5 Jan'09 Mar' (QMS) & 400 (Environment) of AGTP, Tripura. c) HRD i) Certificate in Project management. Officers I ii) IPMA Level (8, C & D) Officers I I 4 Certification in Project Management d) Energy Audit ( Nos. of Plants) Feb' 09 Mar'09 March'09 Sub Total SECTOR SPECIFIC PARAMETERS a) Gross Generation**". I Hydro MU I MU b) i) Capacity Index Hydro % ii) Availability % c) Recovery of Cunent dues % I d) Physical Achievement (time overrun I.5 In time In time, from current year MOU)Completion Schedule IAnnexureII) Sub Total 0.5
4 5. Performance Indicator Unit Wl. Performance Rating BE RE BE No E TERPRISE SPECIFIC PARAMETERS a) Safely i) Annual Dam Safety Inspection of power stations under operation Nos ii) Designating of Safety Officers at Power Stations & Ongoing projecls. Nos I 3 b) Environment Protection Measures for Kameng H.E. Project. % I c) Expenditure on Corporale Social Responsibility Scheme on Ihe basis of amounl spenl against Rs. in Crs auocated budget d) eprocurement/epaymenl (% of lotal procurement/payment during the year) % Sub Tolal 3 TOTAL 00 Gross Profit Rs Crs. Net Profit Rs Crs. Net Worth Rs Crs. Capital Employed Rs Crs. **IncJudes backing down of generation. NOTE: "The target for the year against Static Financial Parameter with respect to Gross Margin/Gross Block, Gross ProfitJCapital Employed, Gross Margin, PBDlTffotal employment and Added value/gross Sales are lower as compared to the target for the year This is primarily due to reduction of Gross margin and Gross Profit on account of provision for pay revision approved by the Ministry of Power vide letter No 7/63/00H.I dtd 0/09/006 w.ejoi/oi/997 and expected pay revision due from 0/0/007 as per notification issued by Department of Public Enterprise. The total impact on this account is in the order of Rs 9.50 crores. Besides, provision has also been made for Tariff revision to take care of reduction in Tariff consequent to reduction in loan burden which is under process of finalisation by the Central Electricity Regulatory Commission (CERC) and an amount of Rs crores has been provided on this account which was not considered in the MOD Since the Gross Margin was lower by Rs crores compared to the target of00708, the Gross Profit and Static Financial Parameter involving Gross Margin and Gross Profit is also consequently lower compared to the target of
5 PARTIV SUPPORT FROM GOVERNMENT The following Government support shall be required with a view to enabling the Corporation to achieve its objective. ) The law and order remains a serious problem due to continued insurgency in the N.E Region. NEEPCO finds it difficult to execute the project works in an insecure atmosphere for the workforce. Ministry ofhomeaffairs, Department of Development of N.B. Region and Ministry of Power, Govt. of India are requested to provide adequate security cover for NEEPCO's vital installations and projects underexecutionlnew schemes and their respective personnel working in the projectsi plants. NEEPCO expects the respective state Govt. to maintain law & order for smooth Operation & Maintenance ofcommissioned projects and execution of ongoing project works. ) The Ministry ofpower, Government ofindia would support NEEPCO in clearing the outstanding dues from the State Government under the scheme of tiipartite agreements. 3) The Government ofindia would support NEEPCO in obtaining soft long telm bilateral and multilateral external financial assistance in executing projects in the North East. 4) Govt. will extend support in pursuing Ministry ofpetroleum & Natural Gas for augmenting gas supply to NEEPCO Gas Stations for ensuring targeted generation. 5) The Govt. ofindia will extend support for early fmalization offinancial restructuring ofdoyang H. E. Plant (75MW) in Nagaland by Ministry of Finance, Department ofexpenditure. 6) To support in obtaining various statutory clearances including Environmental and Forest clearance from MOE&F for the projects of NEEPCO, as per statutory requirement and for resolving important issues pertaining to Environment and Forest. 7) The Government ofindia would support NEEPCO in its endeavour to provide imparting overseas professional training to its executives under various training schemes ofthe Govt. ofindia. '\ } '\ PARTV FREQUENCY OF MONITORING AND INFORMATION FLOW For regular monitoring of each activity under various projects in execution, the following procedures are being adopted. a) b) c) d) e) Monthly Statement offinancial cost and expenditure ofprojects to MOPIMHNPClCEA. MontWy Flash Report to CEAlMOPIMHNPC. Quarterly Programme Implementation Status Report to MOPU MOPIMHNPClCEA. Monthly Progress ofthe utilization ofexternal assistance to MOPI Pc. Quarterly Performance Review Meeting by MinistI"y of Power. ~~ (ANIL RAZDAN) Secretary to Govt. of India Ministry of Power C:~~ (J. BARKAKATI) Chairman & Managing Director North Eastern ElectIic Power Corporation Ltd. 8 9
6 r i~.~... COMMENTS OF THE PSE QUANTITATIVE PARAMETERS. GENERATIONANDCAPACITYINDEX/AVAILABILITY TARGETS FOR THE YEAR SI. Name of the Generation Yearly Capacity Index! No. Station Capacity (MW) Generation Availability Target (MU) (%) A. HYDRO. Kopili. Khandong 3. Doyang 4. Ranganadi 4X 50 3 X 5 3 X 5 3 X Sub Total (A) a) Net budgetary support Rs Crs. b) MNES grant Rs. 0.3 Crs. c) Internal & Extra Budgetary Resources (IEBR) Rs Crs. TOTAL Rs Crs. 3. PROJECT IMPLEMENTATION TheCorporation will make a total investment ofabout Rs Crores on various schemes during the year subject to investment sanctions wherever necessary. The Corporation will improve the project implementation parameters. 4. PERFORMANCE EVALUATION For the purpose of performance evaluation during the year the Guidelines issued for setting performance targets and evaluation criteria values will be followed. The performance evaluation will be done at the end of the year. B. THERMAL 5. AGBP 6 X X AGTP 4X Sub Total (B)' Total (A+B) FINANCIAL TARGET The Corporation plans to achieve total revenue of Rs Crores during The Corporation will earn a net profit of Rs Crores during the year. The Government will provide a net budgetary supportofrs Crores for a total plan expenditure ofrs Crores during the year as per the proposed plan allocation for the year This investment is envisaged to be met as under: 0
7 EXECUTION OF MILESTONES DURING ANNEXUREI SI. No. Activity Quarter Weights Excellent Criteria value Very Good Good Fair Poor Remarks N A KAMENG HE PROJECT ( 600 MW ), ARUNACHAL PRADESH. BICHOMDAM Completion of Bichom River Diversion Scheme. Dec' 08 Jan' 09 Mar'09 Completion of Bichom Dam 3rd Nov'08 Dec' 08 Jan' 09 Mar'09 excavation (cumulative) 3.90 lakh m J. 3 Concreting of Bichom Dam Feb' 09 Mar' 09 (Cumulative) 74,000 m J 4 5 TENGA DAM Completion of Tenga Dam excavation (Cumulative) 90,000 m J Concreting of Tenga Dam (Cumulative) 5,000 m J HEAD RACE TUNNEL 6 a) Boring of HRT (FaceII) (cumulative) 550m b) Boring of HRT (FaceII) (cumulative) 400m nd I Feb' 09 Feb' 09 Feb' 09 Mar' 09 Mar' 09 Sep'08 Mar' 09 Oct.'08 Nov'08 Dec' No Activity a) Boring of HRT (FaceIII) (cumulative) 0m b) Boring of HRT (FaceIII) (cumulative) 700m a) Boring of HRT (FaceVI) (cumulative) 00m b) Boring of HRT (FaceVI) (cumulative) 600m a) Boring of HRT (FaceVII) (cumulative) l300m b) Boring of HRT (FaceVII) (cumulative) 800m SURGE SHAFT Boring of surge shaft 60 m length Completion of Lining of Surge Shaft 40 m (cumulative) Quarter nd nd nd 3rd Weights Excellent Nov'08 Jan'09 Criteria value Very Good Good Sep'08 Oct.'08 Mar'09 Sep'08 Mar'09 Sep'08 Mar'09 Dec'08 Oct.'08 Oct.'08 Jan'09 Mar'09 HIGH PRESSURE TUNNEL IIC FABRICATION & ERECTION OF STEEL LINER Fair Poor Nov'08 Dec'08 Nov'08 Dec'08 Nov'08 Dec'08 Feb' 09 Mar' 09 Fabrication of Steel Liner Mar' MT (Cumulative) Boring of vertical shaft from BPl to BP. Erection of Steel Liner from BP to Surge Shaft 40 m length Cone. Behind Steel Liner from BP to Surge Shaft 40 m len>rth Sept'08 Mar'09. Mar'09 Remarks
8 Sl. Activity Quarter Weights Criteria value Remarks No. Excellent Very Good Good Fair Poor 6 Completion of open excavation Mar'09 of Surface Penstock 00% (Cumulative) 7 Boring of underground penstock Mar' m (cumulative) POWERHOUSE 8 Completion of open excavation Dec'08 Jan'09 Mar'09 (All units)loo% Completion. of Power House Pit i/c mudmatting 9 Completion of concreting Jan'09 Mar'09 (Cumulative) 5,000 m 3 C (a) Sub Total 3 NEW HYDRO PROJECTS: PARE HEP (0 MW), ARUNACHAL PRADESH Award of CivilHydroMechanical 3rd Oct'08 Nov'08 Dec'08 Jan'09 Package. Award of ElectroMechanical Package. Sub Total Project Cost: Rs Crs. (Including IDC ofrs 48.87Crs & FC Rs 0.39 Crs.) (June,007 Price Level). 3rd Oct'08 Nov'08 Dec'08 Jan'09 Achievement of Milestones are subject to CCEA clearance. SI. No. (b) D (a) (b) Activity Quarter Weights MAWPHU HEP (90 MW), MEGHALAYA Completion of EIA and EMP 3rd I studies for Mawphu RE. Project and submission to State GOYl. Sub 0tal Excellent Noy'08 Criteria value Very Good Good Dec'08 NEW THERMAL PROJECTS: TRIPURA GAS BASED POWER PROJECT (04 MW), TRIPURA Conclusion of Gas Supply st I April'08 May'08 Agreement Floating of NIT for EPC Contract nd I June'08 July'08 Sub 0tal GARO HILLS THERMAL POWER PROJECT (500 MW), MEGHALAY<\ Award of Contract for EIAIEMP nd J Jun'08 July'08 studies Award of Contract for Preparation nd I Sept'08 of Detailed Project Report Sub Total TOTAL 30 Jan'09 June'08 Oct'08 Fair July'08 Sept'08 Sept'08 Noy'08 TIME AND COST OVERRUN OF ONGOING H.E. PROJECT BEING EXECUTED BY NEEPCO Poor Mar'09 Oct'08 Oct'08 Dec'08 Remarks ANNEXUREII SI. Project Name/ Energy Average Original Sanction Last year MoU Current year MoU No Capacity/ (MU)/ revenue State / Date of " year (Rs. Crs. Completion Cost Rs. Completion CostRs. Completion Cost Rs. Sanction tariff per day) Schedule Cr. (PL) Schedule Cr. (PL) Schedule Cr. (PL). KamengHydro Electric Dec.' Mar.'ll Mar.'ll Project (600 MW).48 (Mar.'04 (Mar.'04 (Mar.'04 Arunachal Pradesh PL) PL) PL)
9 PAST FIVE YEARS DATA FOR THE PERFORMANCE INDICATORS APPENDIX I Financial Schemes Generation Capacity Gross Net profit/ Plant Recovery Milestones year (MU) Index! Margin Net Load of Current Target Achievement Machine (Rs. in Crs.) worth Factor Dues (Rs. Availability (% ) (% ) (% ) in Crs.) Hydro 789 ( Anticipated) H:,dro Hydro Hydro Hydro } } } } } } 7.64 } 55.3 } } 55.3 } } } 5 } ) } 8 } 7 } } 4 } 0 } } 4 } 4 }586.5 } } 6
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