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Centre approves Dispute Avoidance Mechanism for Hydro power projects

This mechanism would reduce the conversion of initial disagreements and also for expeditious elimination of disagreements in a ‘just and fair’ manner. It would also help avoid time and cost overruns so as to ensure timely completion of the Projects, said a senior officer of the Power Ministry.

SNS | New Delhi |

Centre on Wednesday gave approval to a “Dispute Avoidance Mechanism” through ‘Independent Engineer’ (IE) for construction contracts of Centre Public sector Units executing Hydro Power Projects.

This mechanism would reduce the conversion of initial disagreements and also for expeditious elimination of disagreements in a ‘just and fair’ manner. It would also help avoid time and cost overruns so as to ensure timely completion of the Projects, said a senior officer of the Power Ministry.

A “Dispute Avoidance Mechanism” through ‘Independent Engineer’ (IE), has been given approval by the Union Minister of Power, New and Renewable Energy Shri R K Singh. Being put in place for Construction Contracts of CPSEs executing Hydro Power Projects,

The Mechanism would have independent, third-party Independent engineers, widely used in major infra projects, nationally as well as internationally, for the specific project. The Independent Engineers would have an “Expert” having domain knowledge of the subject as well as commercial and legal principles.

The IE could have regular oversight over the project, with open communication with all the key stakeholders that can play an effective role in the avoidance of disputes, the Power Ministry said.

The decision to set up a Dispute resolution Mechanism was taken following the recommendations of a Committee of Board Level officers, which asked for a Mechanism to settle disputes and disagreements related to Contracts at the inception stage. It would lead to effective utilization of the budget and prevent time and cost overruns, the Ministry said.

The Ministry of Power would prepare a panel of domain-specific Experts with a high level of integrity and proven track record by adopting a transparent and objective selection. The Ministry said the Dispute Avoidance Mechanism through IE as above would be adopted by all the Hydro CPSEs executing Power Projects. IE would be implemented in all cases irrespective of the fact that the contractor is a CPSE or a private party.