The government on Tuesday proposed a set of guidelines to ensure transparency in award and implementation of public-private partnership (PPP) projects. The idea is to increase investments in infrastructure to $1 trillion in the 12th Plan, starting April 1, 2012, mainly through involvement of the private sector.
According to the draft guidelines relased for public scrutiny by the finance ministry, the government would set up a dedicated dispute resolution mechanism to address issues related to the bidding and award of PPP projects. It is also proposed that a mechanism of independent pre-bid rating of projects would be instituted to assist investors in identifying well-structured work contracts.
?PPP projects processes need to be transparent to retain the trust of the stakeholders,? the government stated in draft national PPP policy 2011, issued on Tuesday. This is first of its kind effort of the government to spell out overarching principles that would be guide all PPP projects in the country. These principles are to be followed by all central and state agencies.
The emphasis on transparency comes at a time when the government foresees 50% of total infrastructure investment in 12th plan to come from private sector. PPP would be used as a tool to develop facilities specially in roads, ports and railways through this investment.
In the policy, the government has proposed ascertaining market price of natural resources where PPP projects give an implicit ownership rights to the developer. Alternatively if resources are provided for a specific use, such as use of land for a transport project, alternative exploitation of land will be prohibited. ?This would be a non-negotiable position,? the draft said.
The government also said that it would recognise only four PPP models ? BoT (toll), BoT (annuity), performance based maintenance contracts and modified design-build contracts or turnkey projects.