The finance ministrys new scheme for hassle-free approval of public-private-partnership (PPP) projects in infrastructure came into effect last week, with the ministry notifying the guidelines in this regard.
According to these guidelines formulated by the department of economic affairs in the ministry, appraisal of PPP projects of all sectors costing more than Rs 100 crore but less than Rs 250 crore would now be considered by a two-member committee comprising the DEA secretary and the secretary of the ministry sponsoring the project. Earlier these projects were required to get the approval of the larger PPP-Appraisal Committee which meets less often and functions in an allegedly tedious manner.
Similarly, a two-member panel comprising the DEA secretary and the secretary, department of road transport and highways, will now appraise and approve the projects under the National Highways Development Project costing between Rs 250 crore and Rs 500 crore. These projects would also steer clear of PPP-AC. All these projects will, however, continue to require the nod of Cabinet Committee of Economic Affairs.
The bidding for the specified NHDP projects will be according to the procedure endorsed by PPP-AC. This includes the process of two-stage bidding, pre-bid qualification norms, etc.
This implies that in the first stage, NHAI could shortlist and pre-qualify bidders on the basis of the pre-bid qualification norms for inviting financial bids in the second stage. Of course, the modal concession agreement approved by the competent authority is being followed.
Prior to seeking the two-member panels nod, the projects will have to be appraised by the standing finance committee (SFC) and the request for proposals (RFP) would include a copy of all agreements that are proposed to be entered into with the successful bidder. After formulating the draft RFP, the administrative ministry would seek clearance of SFC.
The finance ministry has also spelt out definite timelines for the various stages of approval to cut delays.The liberal dispensation for approvals has been put in place for road projects in view of the fact that the present mechanism comprising PPP-AC and CCEA was found hampering implementation of the National Highways Development Programme.
Till about three months ago, NHAI was not able to award a single new build-operate-transfer (BOT) project as per the new Model Concession Agreement finalised as early as in March 2006. Phase III of NHDP, which is to be developed solely on a BOT basis, had been facing major delays. Of the 11,113 km of highways envisaged under Phase III, less than a quarter is under implementation.
Official sources said that a number of NHDP projects have received approvals in the past few weeks and this was expected to impart a fresh momentum to the projects.