Section 3(7) in The Orissa Electricity Reform (Transfer of Assets, Liabilities, Proceedings and Personnel of Gridco to Distribution Companies) Rules, 1998
(7)The State Government, in accordance with the Agreement dated 10 July 1996 (hereinafter called the "Orissa Agreement") with the International Bank for Reconstruction and Development (hereinafter called the "IBRD") and pending the transfer of the Distribution Business from Gridco to the Distcos, had for the purposes of strengthening the Distribution System lent to Gridco part of the proceeds of the loan from the IBRD through subsidiary loan agreements entered into between the State Government and Gridco. The assets and interest in assets related to the Distribution Business and forming part of the Specified Assets of each of the Distcos, the acquisition of which was funded from the loan from IBRD shall stand transferred from Gridco to the relevant Distco together with the corresponding liabilities which shall form part of the Specified Liabilities in terms of these rules subject to the condition that :(i)Within the time prescribed for the purpose by the State Government the relevant Distco shall execute a subsidiary loan agreement with the State Government and a project implementation agreement on terms and conditions approved by IBRD, inter alia, providing for schedule of repayment of all such Specified Liabilities on account of funds provided from the loan from IBRD, the interest, charges and other outgoings thereon, the security and safeguards to the satisfaction of the State Government to protect the interest of IBRD and the State Government and other applicable terms and conditions, whereupon the obligation to make payment of such Specified Liabilities shall stand transferred from Gridco to the Distcos; and(ii)In the event the subsidiary loan agreement is not entered into within the time specified by the State Government the relevant Distco shall forthwith pay to Gridco the amounts due to Gridco with interest, charges and outgoings on the funds from IBRD used for the acquisition of the Specified Assets transferred to the relevant Distco to enable repayment by Gridco to the State Government the relevant amounts in accordance with the subsidiary loan agreement signed between Gridco and the State Government.
