The parties reaffirmed their commitment to this agreement as follows: 11. An interpretation of the above terms of the ESCO contract shows that it is essentially an energy performance contract, i.e. an operating and maintenance contract in which the main objective of the contractor (the complainant) is to implement energy-saving measures in Thane Municipal Corporation`s 12,000 traffic lights. As part of the implementation of the energy-saving measures, the complainant is required to install LED streetlights and smart access panels to the existing public lighting infrastructure. If an existing infrastructure for the installation of LED fixtures is not compatible, the applicant is required to make the necessary modifications and modifications. During the duration of the contract, the complainant is required to operate and maintain public lighting and to ensure a reduction in energy consumption. The applicant`s performance is measured by the energy savings, i.e. the difference between the energy consumption before the installation of LED lights (energy baseline) and the amount of actual energy consumed after energy-saving measures. In return for carrying out this activity, TMC pays the complainant a fee, the so-called energy-saving charge, which is determined on the basis of a formula. The payment of the levy to the applicant is only made if an energy saving of 60% or more of the energy base is made. If the energy saving is less than 60% of the energy, the complainant must pay a fine. From the above, we note that the complainant`s activity with respect to the ESCO contract is a service-oriented activity.
Although the complainant used goods such as LED lamps, smart access plates they purchased for the provision of this service, it is not for the goods that payment is made to them. The complainant is paid for the quantum amount of energy saved that can only be obtained through the use of LED lights. The complainant remains the owner of the LED lights and other devices they installed during the term of the contract.