Revamped

Distribution
Sector Scheme
28th February 2022
 Scheme Objectives
Improve quality, reliability Reduce AT&C losses
Reduce ACS-ARR Gap
and affordability of power to pan-India levels of
to zero by FY-25
supply 12-15% by FY-25

Key Features Overview

• State owned discom and state/UT power dept. are
Part-A
eligible • Component - I Metering
• Outlay of INR 3 lakh crores and GBS of INR 97,361 • Component – II Distribution Infrastructure works
• Component – III Project Management
Cr.
• REC and PFC are Nodal Agencies Part-B
• Training, Capacity Building and other Enabling &
• Scheme duration: 5 years Supporting Activities
• All ongoing schemes to be subsumed within RDSS
 Overview | Metering
Focus on smart metering of DTs and Feeders and smart prepaid metering of 100%
consumer base (except agriculture)

Smart Feeder Metering Smart DT Metering Smart Prepaid Consumer Metering

100% by Dec ‘22 100% by Dec ‘23 (except 100% by Mar ‘25
agriculture)

• Implementation model - TOTEX mode

• Priority areas (high loss areas, govt. offices, AMRUT cities etc.) - To be completed by
FY-23
 Overview | Distribution Infrastructure Works
Focus on strengthening and modernizing infrastructure to reduce losses and improve quality of power supply

Feeder Segregation
Loss Reduction Separation of Agri feeders to
AB Cabling & HVDS enable KUSUM implementation

System Augmentation
Modernization Replacement of HT/LT lines,
UG Cabling & Addl HT lines, IT/OT works, Construction & Augmentation
SCADA & DMS system in urban areas of S/S

Disaster Resilient Infra Works N/W Augmentation for EV Charging

Targeted disaster resilient infra works in Upstream n/w augmentation for upcoming
areas notified by CEA/ NDMA charging infra
 Differentiators from other schemes
Reforms Based and Result Linked
Results Linked Pre-Qualification Criteria
Funding linked to results Assistance based on Pre-Qualification
/performance and basic minimum benchmarks

Reforms Evaluation
Customized to Discom Objective evaluation
specific needs mechanism based on REF

Network improvement Smart Prepaid Metering

GBS for loss reduction and Focus on achieving smart
system modernization works metering across infrastructure
 Financing Arrangement
S.No Item Description Quantity Outlay (Rs. Cr) Grant % (Max) Grant (Rs. Cr)
15% (max. Rs.900/
Prepaid Smart metering (Consumer, DT, and
1 25 crore 1,50,000 meter for consumer 22,500
feeder level)- January 2020 onwards
meters)
Other costs including (billing modules, data
2 management, data analytics, and support to Lumpsum 800 100% 800
implementation etc.)
Sub-Total: Part A – Funding for Smart metering 1,50,800 23,300
Other Infrastructure works (e.g., SCADA, DMS, 60% or 90%* as the
3 1,51,528 73,301
AB cables, feeder segregation etc.) case may be
Sub-Total: Part B – Capacity building etc. 1,430 100% 1,030*
Total 3,03,758 97,631
*90% for special category states- NE and hill states, J&K, Ladakh, A&N islands, Lakshadweep

• Metering (consumer, feeder and DT) to be carried out in TOTEX mode - Grant for metering 15%
• State Govt/DISCOM may also provide Budgetary support in TOTEX mode, including in hybrid mode - PPP partner to
provide metering services in DBFOOT
• For PMA appointment, upto 1% of the project cost for both components of Part-A is eligible for 60%/ 90% Grant.
 Enablers for Industry Participation
Price Variation Clause
SBD for balanced risk sharing
PV allowed on quantity/ price
Any deviation needs DRC/ nodal
variations
agency approval

Payment delinked from GBS

Payment Security Mechanism Payments to suppliers and contractors
• Direct debit for AMISP are delinked from release of GBS by
• Penalty for delayed payments the govt.

Transparent Quality Assurance Final Milestone Payment linked to

Provision for material inspection in GIS Tagging of assets for real time
3rd Party NABL accredited labs on update of Asset register
sample basis
 Expectations from the Industry
Ramp up domestic manufacturing Utilization of Funds issued in the
to cater to the large upcoming scheme for execution of scheme works
demand only

Product Certifications in line with Plan robust supply chain channels for
SBD requirements and globally timely delivery of projects planned under
recognized standards the scheme

AMI - System Integration Skilled Manpower

Partners should be identified for Identify competent manpower and invest
efficient integration of HES, MDM in up-skilling existing manpower to cater
and Billing Software to the surge in demand
Thank You
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 Queries from the Industry
In last few schemes launched by MoP on Distribution reforms, there was a gap in payment by utilities
which has resulted huge outstanding at Industry level. Is REC planning to see as in this scheme the gaps
of last schemes are covered properly.

REC will be giving suggestive payment terms in the standard bidding document for payment to suppliers and
service contractors. There are penal clauses for payments not made within stipulated timelines. Also, the release
of payments is delinked to release of grants

How do REC ensure faster and timely completion of scheme? Value of tenders should be large or small?
Or some guidelines to be adopted in line with Saubhagya scheme.
• It is a result linked scheme wherein discoms have an incentive for timely completion and achievement of
annual targets to get disbursement of funds.
• There will be a continuous evaluation of discoms every year which will help them in assessing the
shortcomings and plan better to achieve their future targets
• REC will be issuing a Standard Bidding Document for maintaining uniformity between discoms which will
serve as a common guideline for bidding and implementation.
• A centralized portal will be developed for real-time monitoring of key performance parameters
for transparency and identification of bottlenecks
 Queries from the Industry
In recent notification QCBS has been notified. is REC considering this in RDSS projects

While preparing the SBD, various pre-qualification criteria have been added after consultation with the industry
and sector experts to ensure that players offering quality solution should qualify. Hence, the issue of quality will
be addressed by the same.

IEEMA has represented for PVC to be included for RDSS projects. Is REC considering to
adopt IEEMA PVC formula into to. Without any limitation?
Yes, it has been included as part of the Standard Bidding Document for Infra Works.
 Queries from the Industry
Price Variation Clause
The quantity of items given in the Price Schedules forming part of the Contract are provisional. The variation in quantity of the
items shall be within the limit of plus/minus (+/-) fifty percent (50%) for individual items. In case the quantity variation of the
individual items is beyond the limit specified above, the unit rates for the quantity beyond the said limit, shall be mutually
agreed based on prevailing market rates as may be fair and reasonable.

It is to be noted that Employer may choose to approve a variation of upto 20% of contract value (calculated using the rates
quoted at the time of bidding) which has been caused due to quantity variation. For variation of greater than 20% but less
than 50% of contract value (calculated using the rates quoted at the time of bidding), Employer will need to take DRC
approval for approving the said quantity variation.

The Ex-works price component, less advance will be subject to price adjustment

Price Adjustment clause will be effective after 12 months from the effective date of the contract
 Queries from the Industry
Price Variation Clause

Price Variation Clause is applicable for:

• ACSR Conductor

• Power Transformer

• Distribution Transformer

• Cables

• Steel Structure

• 66/11kV and 33/11kV switchgear incl circuit breaker and isolator

• Aerial Bunched Cables

• Civil Works and Erection

 Evaluation Framework
Pre-Qualification Criteria Results Evaluation Matrix
• Timely publication of audited/unaudited accounts • Financial Stability - ACS-ARR Gap, AT&C Losses,
Subsidy/Govt. Dues, debtor/creditor days
• Creation of no new regulatory assets
• Outcome of Infra works - SAIFI, hours of supply,
• 100% payment of subsidy for previous year and
advance payment of subsidy up to current period DT Failure rate and energy accounting

• Payment of current dues by all Govt Depts/ Local • Infrastructure Works - feeder separation, % smart
Bodies meters, etc.
• Publication of Tariff order for the current year and • Policy & Structural Reforms Corp Governance,
true up of penultimate year
CGRF, digital payments, tariff reforms,

Action Plan
Part I Metering & Distribution Infrastructure Works: for loss reduction and network strengthening
Part II Reform measures for financial viability: reforms for reduction of losses & ACS-ARR gap
Part III Results, Outcomes and Evaluation
 Overview | Training & Capacity Building

Augmentation of SGKC Training/ Capacity Building/ Awards & Incentives

• Scaling up of various smart grid • Across domains of
technologies o Corporate Governance
o Advanced Technology Intervention Area
• As per the Part B of the scheme
o Technical Matters;
o SGKC will be upgraded as an incubation
center and innovation park • Awards and incentives for DISCOM personnel
o INR 30 Cr. earmarked for the expansion
Consultancies
activities (100% GBS)
• Support national, regional and state levels to assist
o Center for Development of Applications is
MoP and States/Discoms
also planned for the application of AI in • Cost towards fee for the scheme period will be
distribution system covered under Part B of the scheme
 Smart Metering Timelines
• First phase of implementation by December 2023 (~100 Mn Smart meter installation) includes:
a) All electricity divisions of 500 AMRUT (Atal Mission for Rejuvenation and Urban Transformation) cities with AT&C
losses > 15%
b) All Union Territories
c) MSMEs and all other industrial and commercial consumers
d) All government offices at block level and above
e) Other areas with high losses
• Second phase which includes the smart metering for the rest of the consumer base is expected to be carried out by
December 2025. Target for Phase-I has been formulated with the sole objective of ensuring early realization of benefits
through smart metering by focusing on areas with high losses, consumers with high electricity consumption etc. and
driving the implementation in mission mode to achieve 60% smart metering penetration by 2023.

Target for Phase-I has been formulated with the sole objective of ensuring early realization of benefits through
smart metering by focusing on areas with high losses, consumers with high electricity consumption etc. and
driving the implementation in mission mode to achieve 60% smart metering penetration by 2023.
 Learning from Previous Scheme
❑ Eligibility criteria: ❑ Testing and Inspection: Need was felt to overhaul the
process to achieve better quality material through a leaner
‒ Similar project experience was required
process – shifting from PDI to 3rd Party testing
under both technical and commercial
criteria – need was felt to simplify ❑ Price variation: Ceiling on price variation was putting
requirements undue burden of market risk on TkCs due to high price
escalations in last few years – mechanism for mitigating this
‒ Wider participation to be encouraged while
risk to a large extent
ensuring adequate prior relevant
experience ❑ Timely payments: Delayed payments were creating a
challenge for TkCs leading to building in greater working
❑ Front loading: Some tenders were being front
capital costs in bid prices
loaded towards supply portion, which resulted in
erection milestones getting less importance from ❑ Greater flexibility to Discoms: To ensure contextual
TkCs, hence affecting scheme timelines – need requirements are met, certain clauses like cost variation,
felt to mitigate any such risks technical specifications and eligibility criteria etc. to be
allowed to be customized, subject to DRC approvals
❑ GIS mapping of assets: Despite repeated
impetus, progress was not as desired – learning
of linking this with key project milestones
 Terms of Inspection & Testing
For inspection, materials have been segregated into three categories:

• Category – A (Pre-Dispatch Inspection): To be carried out in the factory before the dispatch of the
material
• Power Transformers (Short-circuit test to be conducted post receipt for the first PT that is received)

• Category – B (Third Party Inspection): Random samples sent to a third-party inspecting agency
accredited by NABL post arrival at site (in line with respective IS)
• Distribution • OH/UG Conductor • Insulators • Control & Relay
Transformer Panel
• Poles • Circuit Breaker • Cables

• Category – C (On-site inspection): For all other materials not covered under Category A and B
 Key Clauses of SBD
Clause Details
• PV allowed for:
• ACSR Conductor • Station/ PT (Copper Wound) • Station / DT (Aluminum Wound) • Cables
• Aerial Bunched Cables • Isolators • Civil Works and Erection
Price Variation • 66/11 KV & 33/11 KV Switchgear (indoor/outdoor) including 66/33/11 KV Circuit Breakers

• Subject to price variation in line with IEEMA guidelines without any ceiling
• PV allowed beyond original delivery dates upon approval of time extension by Employer
• Variation in quantity within limit of (+/-) 50% for individual items such that total variation is
limited to 20% of Contract Price
Quantity
Variation • Beyond specified limits, rates shall be mutually agreed based on prevailing market rates
• Owing to variations in quantity, if contract price variation is beyond 20% and upto 50%,
Employer needs to seek DRC approval - Under no circumstance, contract price variation
beyond 50% would be given
• PM shall release payment within 45 days of receipt of invoices from the contractor - in
Delayed case of delay beyond 45 days, Employer shall pay interest at SBI's Base rate
Payments • Interest cost paid by Employer towards delay in making payments to the contractor
should not be included in the total project cost 20
 Key Clauses of SBD
Clause Details

• Employer may direct the contractor to create a dedicated bank account for usage of the
Dedicated
funds under the project - details of transactions under this account will be shared by
Bank Account
contractor to Employer at the time of key milestones

• Contractor shall pay liquidated damages at 0.5% for each week of Contract Price or the
Liquidated relevant part thereof
Damages • The aggregate amount of such liquidated damages shall in no event exceed 5% of the
Contract Price.
Fund
• Payment to Contractor by Employer shall be released, without any linkage to
disbursals and
disbursement of funds by nodal agency under the RDSS
contractual
• Employer may also consider delegation of payment to circle level to simplify payment
payment
process
milestones
• Duration of the project has been left to DISCOM’s discretion which can be finalized by
Time Schedule
DISCOM’s in line with the size of each package.
21
 Industry Participation Framework
Component-I Component-II Component-III
Metering Distribution Infra Works Project Management
• Standard Bidding Document for • Turnkey contractors/ agencies to • SBD released for onboarding PMAs for
AMI service provider (AMISP) drive Distribution infrastructure end-to-end project management of the
released for Discom’s guidance strengthening works at field level scheme with clear governance and
monitoring framework
• Opens the Indian smart meter • Standard Bidding Document
market for all players (national as issued to maintain uniformity in
well as international) execution

• Scope for large scale production

and testing of smart meters

• Meter specifications standardized

to maintain uniformity