Prof. (Dr.

) Kedar Bhagwat

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 To secure good value in terms of
◦ performance standards,
◦ user concern,
◦ public revenue
◦ & contingent liabilities.

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 For PPP policy , procedures & approving
projects
◦ Committee on infrastructure
◦ Chairman : PM.
◦ Members :
 Fin Minister,
 Earlier Deputy Chairman Planning commission, now
Niti Aayog
 Ministers of respective ministries +
 two members of planning commission/Niti Aayog

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 PPPAC ( PPP appraisal committee)
◦ Support from Special cells with Dept of Economic
Affairs
◦ Nodal agency : MOF
◦ PPP Appraisal unit at Planning commission / Niti
Aayog to prepare appraisal notes for PPPAC

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 Below 100 cr.
◦ by expenditure finance or Standing Finance
committee
 100 cr. to 250 cr.
◦ Secy. DEA + Secy. respective ministries
 More than 250 cr.
◦ for PPPAC

PPP Audit Guidelines 2009 5

 Viability Gap Funding (VGF)
◦ Only for PPP projects
◦ Proposed by central / state ministries or statutory
authorities
◦ chosen through competitive bidding
◦ generating revenue by collecting user charges
◦ Only upto 40% of minimum of the Authority total
project cost / VGF is the bid the criteria and bidder
who quote lowest bid in terms of VGF is the
selected bidder

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◦ Grant .. one time or deferred repayment or soft loan
◦ For state govt projects, 20% of the VGF is provided
by respective State Govt. while additional VGF upto
20% to be provided by Central Govt. or respective
ministries
◦ Disbursement
 After pvt. Party has expended it equity contribution.
 Subsequently in proportion to disbursements by Lead
Financial Institutions ( who will get final approval from
Empowered institution / committee)

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 No deviations allowed unless approved ..
 Objective : help partners by spelling out &
balancing mutual rights & obligations.
 Contents
◦ Regulatory framework & policy of concerned sector
◦ Rights & obligations

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◦ Financing of projects,
◦ mitigating and unbundling of risks, allocation of
risks and rewards,
◦ force majeure & termination
◦ concession periods, technical parameters based on
output parameters
◦ Action in case of failure in financial closure

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 State-wise laws / rules and regulations
 Special dedicated cells/ nodal offices formed
to assist formulation & appraisal of PPPs in all
sectors

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 Upto 100 cr.
◦ By Empowered Institution
 100 to 200 cr.
◦ By Empowered committee
 Over 200 cr.
◦ Finance minister

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