M .KARPAGA VINAYAGAM - (1.) The question raised in this Appeal is as follows: "Whether the period of completion of the Project namely 36 months should be calculated from the date of Investment Approval or from the date of Letter of Award for the purpose of calculating Interest During Construction -
(2.) IN this case, the Central Electricity Regulatory Commission (Central Commission R -1) rejected the claim of the Power Grid Corporation of India (Appellant) over the Interest During Construction and Incidental Expenditure During Construction for a period of 14 months by reckoning the period of 36 months from the date of Investment Approval instead of the date of first Letter of Award as claimed by the Appellant through the impugned order dated 1.6.2011. Aggrieved over the same, the Appellant has presented this Appeal.
(3.) LET us see the relevant facts leading to the filing of this Appeal: (a) Power Grid Corporation of India, the Appellant herein is a Government Company discharging the functions of the Central Transmission Utility under Section 38 of the Electricity Act 2003. The Appellant was entrusted with the implementation of the System Strengthening Scheme VII of Southern Regional Grid (Transmission Project) in Southern Region. (b) On 31.5.2005, the Board of Directors of the Appellant accorded the Administrative Approval and Expenditure Sanction to the said Transmission Project and approved an investment of Rs.279.30 Crores including the Interest During Construction of Rs.17.30 Crores for the same. The Implementation Schedule of the project as approved by the Board of Directors was 36 months from the date of first letter of award. (c) On 23.8.2006, the Appellant issued the First Letter of Award for the Project. Accordingly, the scheduled date of completion of the project worked out as 22.8.2009. There upon, the commercial operation was commenced on 1.8.2009. In the meantime, on 19.1.2009 and 3.2.2009, the Central Commission notified the Tariff Regulations 2009 and issued the Statements of Objects and Reasons relating to the said Regulations respectively. (d) The Appellant on 9.3.2010, filed a Petition No.72 of 2010 before the Central Commission for the approval of the final Transmission Tariff taking into account the capital expenditure including Interest during Construction and Incidental Expenditure during Construction incurred upto date of commercial operation and the estimated Additional Capitalisation projected to be incurred from the date of commercial operation to 31.3.2012. (e) The Central Commission by its order dated 1.6.2011while approving the tariff for the project, rejected the claim of the Appellant of Interest During Construction(IDC) and Incidental Expenditure During Construction(IEDC) up to the date of Commercial Operation and disallowed these components for a period of 14 months holding that the project was not completed within stipulated time of 36 months to be reckoned from the date of Investment Approval i.e. 31.5.2005 and not from the date of Letter of Award namely 23.8.2006 as contended by the Appellant. The Central Commission held that since there was a delay in the commissioning of the transmission system by 14 months, IDC and IEDC for this period would not be allowed in the Capital cost of the project. Feeling aggrieved, the Appellant has filed the present Appeal. According to the Appellant, the Central Commission has wrongly reckoned the period of execution of the project from 31.5.2005, the date of the approval of the project instead of 23.8.2006, the date of 1st Letter of Award for considering the scheduled commissioning for a period of 36 months after ignoring the relevant Regulation -7 of the Tariff Regulations 2009.;