THE PUNJAB
PUBLIC-PRIVATE PARTNERSHIP FOR INFRASTRUCTURE ACT 2010
( IX OF 2010)
[20th
July, 2010.]
An
Act
to create an enabling
environment for private sector participation in infrastructure
development in
the Punjab through public-private partnership projects.
Preamble.– Whereas it is expedient to
expand the provision of infrastructure services and improve their reliability
and quality for accelerating economic growth and achieving the social
objectives of the Government; to mobilize private sector resources for
financing, construction, maintenance and operation of infrastructure projects;
to improve efficiency of management, operation and maintenance of
infrastructure facilities by introduction of modern technologies and management
techniques; to incorporate principles of fairness, competition and transparency
in public-private partnership projects; and to provide for ancillary matters;
It is enacted as follows:
CHAPTER-I
PRELIMINARY
1.
Short title,
extent and commencement. – (1) This Act may be cited as the Punjab
Public-Private Partnership for Infrastructure Act 2010.
(2)
It extends to the whole of the Province.
(3)
It shall come into force at once.
2.
Applicability.
– (1) Subject to the provisions of section 35, the Act shall apply to all
infrastructure projects implemented through PPP in the sectors listed in
Schedule I.
(2) The
Government may, by notification, amend Schedule I and apply the provisions of
this Act to an infrastructure project of any sector, not enumerated in Schedule
I.
3.
Definitions.
– In this Act–
(a)
“bid” means a technical and financial proposal
submitted by a person who is eligible under the Act to undertake an
infrastructure project;
(b)
“Committee” means the PPP Steering Committee notified
by the Government;
(c)
“company” means a company formed and registered under
the Companies
Ordinance 1984 (XLVII of 1984)
and includes a company incorporated outside Pakistan or under any law prior to
the Ordinance XLVII of 1984;
(d)
"construction" includes reconstruction,
rehabilitation, renovation, improvement, expansion, addition, alteration and
related activities;
(e)
“consortium” means a joint venture of persons desirous
of entering into a PPP agreement;
(f)
"Government" means the Government of the
Punjab;
(g)
“Government Agency” means a department, attached
department, body corporate, autonomous body of the Government, local government
or any organization or corporation owned or controlled by the Government;
(h)
"infrastructure" means facilities and
services in one of the sectors listed in Schedule I;
(i)
"investment" includes development and
pre-operative capital expenditure made or incurred on services, land,
construction and equipment;
(j)
"lender" means a financial institution, bank
or an establishment providing financial support, with or without security;
(k)
"local government" means a local government
as defined in the Punjab Local Government Ordinance 2001 (XIII of 2001);
(l)
"person" means a company, entity, firm,
association, body of individuals, or a sole proprietor other than a Government
Agency;
(m)
"prescribed" means prescribed by the rules or
the regulations;
(n)
"private party” means a person who enters into a
PPP agreement with a Government Agency;
(o)
“project” means a project implemented on a PPP basis in
one of the infrastructure sectors listed in Schedule I;
(p)
“Province” means the Province of the Punjab;
(q)
"PPP" means a partnership between the public
sector represented by a Government Agency and a private party for the provision
of an infrastructure facility or service with a clear allocation of risks
between the parties;
(r)
“PPP agreement” means a contractual arrangement of any
one of the types described in Schedule II, which is made between a Government
Agency and a private party;
(s)
“PPP Cell” means the PPP Cell established under the Act;
(t)
“regulations” means the regulations framed under the
Act;
(u)
“Risk Management Unit” means the Risk Management Unit
established under the Act;
(v)
"rules" means the rules made under the Act;
(w)
"Schedule" means a Schedule appended to the
Act; and
(x)
"user levy" means a levy which may be
collected by a private party under the PPP agreement and includes a tariff,
toll, fee or charge.
CHAPTER-II
INSTITUTIONAL ARRANGEMENTS
4.
PPP Steering
Committee. – (1) The Government
shall, by notification, establish the Committee to promote, facilitate,
coordinate and oversee infrastructure projects using the PPP approach to be
known as the PPP Steering Committee.
(2)
The Committee shall consist of the following members:
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(a) Minister for Planning and Development;
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Chairperson
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(b) Minister for Finance;
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Vice Chairperson
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(c) Minister for Local Government;
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Member
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(d) Chairman,
Planning and Development Board of the Government;
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Member
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(e) Secretary
to the Government, Finance Department;
(f)Secretary to the
Government,
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Member
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Planning and Development Department;
(g) Secretary to the Government,
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Member
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Irrigation and Power Department;
(h) Secretary to the Government,
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Member
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Communications and Works Department;
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Member
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(i) Secretary
to the Government, Transport Department;
(j) Secretary
to the Government,
Housing, Urban Development and
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Member
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Public Health Engineering Department;
(k) Secretary to the Government,
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Member
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Commerce and Investment Department;
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Member
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(l)
Secretary to the Government, Education Department; Member
(m)
Secretary to the Government,
Health Department; Member
(n)
Member (PPP),
Planning and Development Board of
the Government; Secretary
(3)
The Committee shall–
(a)
formulate a PPP policy for approval of the Government;
(b)
supervise and coordinate implementation of the PPP
policy by the Government Agencies;
(c)
approve, reject or send back for reconsideration the
project proposal submitted by a Government Agency;
(d)
decide on any direct or contingent support for a
project requested by a Government Agency;
(e)
approve, reject or send back for reconsideration the
recommendation submitted by a Government Agency for the contract award to a
private party;
(f)assist the
Government Agencies in solving major problems impeding project preparation and
implementation;
(g)
be the final deciding authority for all the projects;
and
(h)
take all other steps necessary for giving effect to the
provisions of this Act.
5.
PPP Cell.
– (1) The Government shall, by
notification, establish the PPP Cell in the Planning and Development Department
to promote and facilitate PPP development in the Province, assist a Government
Agency in preparing and executing high-quality projects, and act as a PPP
catalyst and advocate, knowledge manager, and policy and project advisor.
(2) The PPP Cell shall–
(a)
provide technical support to the Committee and act as
its secretariat;
(b)
develop operating guidelines, procedures and model
documents for projects for approval by the Committee;
(c)
provide support and advice to a Government Agency
throughout the PPP process;
(d)
evaluate and prioritize project proposals submitted by
the Government Agencies;
(e)
evaluate, in close cooperation with the Risk Management
Unit, the type and amount of government support sought for a project;
(f)
review bid evaluation report, submitted by a Government
Agency;
(g)
prepare and regularly update a pipeline of the
projects; and
(h)
perform any other functions as may be assigned to it by
the Committee.
6.
Risk
Management Unit. – (1) The
Government shall, by notification, establish a Risk Management Unit in the
Finance Department to act as a fiscal guardian for projects using the PPP
approach.
(2)
The Risk Management Unit shall–
(a)
develop risk management guidelines consistent with the
PPP policy for approval by the Committee;
(b)
examine whether requests for government support and the
proposed risk sharing arrangements are consistent with the PPP policy and
fiscally sustainable;
(c)
ensure the inclusion of approved government support in
the annual budget of the Province;
(d)
monitor direct and contingent liabilities of the
Government incurred through the projects; and
(e)
perform any other functions as may be assigned to it by
the Committee.
7.
Government
Agencies. – (1) A Government
Agency shall manage the project throughout its life cycle consisting of
identification, preparation, tendering, implementation and operation.
(2) The Government Agency shall–
(a)
identify suitable projects and prioritize these within
its sector or geographical area of responsibility;
(b)
recruit transaction advisors for project preparation
and tendering;
(c)
supervise the preparation of the feasibility study and
if its outcome is positive, submit the project proposal through the PPP Cell to
the Committee;
(d)
conduct a competitive tendering process consisting of
pre-qualification and bidding to select the private party;
(e)
carry out bid evaluation and submit recommendation on
contract award to the Committee;
(f)
negotiate and sign the PPP agreement; and
(g)
monitor and evaluate implementation and operation of
the project.
(3) The
Government Agency may seek support and advice of the PPP Cell for performance
of any of the functions under this section.
CHAPTER-III
PROJECT DELIVERY PROCESS
8.
PPP
arrangements. – A Government
Agency may–
(a)
enter into a PPP agreement with a private party for the
performance of functions in
relation to the design and
construction of a project, services relating to it or the provision of finance
for the design, construction, operation or others;
(b)
arrange or provide for a payment to the private party
in accordance with the terms and conditions of the PPP agreement;
(c)
enter into an agreement with a person for provision or
arrangement of funding for a project;
(d)
transfer an interest in a project or part of a project
to the private party or subject to the approval of the Government, to a nominee
of the private party by transfer, assignment, conveyance, lease, license or otherwise;
(e)
enter into an arrangement with any other Government
Agency, the Federal
Government, a body, authority or
entity owned or controlled by the Federal Government for a project; and
(f)
subject to the PPP agreement, assume transfer of an
interest of the private party or a nominee of the private party, in a project
or part of a project, by transfer, assignment, conveyance, sale, grant or
surrender.
9.
Project
identification and preparation. – (1) A Government Agency shall identify
and prepare a project, and shall
complete this phase before tendering.
(2)
The Government Agency shall identify and conceptualize
potential projects from its master plans and other planning documents.
(3)
The Government Agency shall prioritize the projects
within its sector or geographical area, using criteria such as supply and
demand gaps, social and economic benefits, financial attractiveness, risks and
uncertainties involved, and readiness for implementation.
(4)
Preparation of a high-priority project shall consist of
a feasibility study, initial environmental examination or environmental impact
assessment, risk analysis, analysis of the need for government support,
stakeholder consultations, determination of the PPP modality, and preparation
of bid documents including a draft PPP agreement.
(5)
The Government Agency shall submit a viable project
proposal through the PPP Cell to the Committee.
10.
Project
prioritization and approval. – (1) The PPP Cell shall exercise quality
control by reviewing the viability of a project proposal and its completeness
in terms of documentation.
(2)
The PPP Cell shall prioritize the projects that pass
the review across sectors and the Province, by taking into account provincial
development objectives, and submit them to the Committee for approval.
(3)
The PPP Cell shall include approved projects in a
priority list of the Province and widely publicize them.
11.
Approval of
government support. – (1) A Government Agency shall include all requests
for government support described in section 18 as an integral part of a project
proposal.
(2)
The PPP Cell shall forward all requests for government
support with budgetary implications to the Risk Management Unit, which shall
review their justification and eligibility, and analyze the fiscal impact of
the related direct and contingent liabilities.
(3)
The Risk Management Unit shall, on the basis of review
and analysis, make a recommendation to the Committee for approval, rejection or
reconsideration of the requested government support.
(4)
If approved by the Committee, the Risk Management Unit
shall make the necessary arrangements for including such support in the annual
budget of the Province.
12.
Consideration
by the Committee. – (1) The Committee shall, by taking into account the
recommendations of the PPP Cell and the Risk Management Unit, consider a
project proposal submitted by a Government Agency and may approve the proposal
with or without modification, reject it or return it to the Government Agency
for reconsideration.
(2) In case a
project proposal is returned for reconsideration, the Government Agency shall
take suitable action on the decision taken by the Committee and may resubmit
the proposal for approval by the Committee.
13.
Selection of
the private party. – (1) After the approval of the project proposal by the
Committee, the Government Agency shall select a private party for the project
through competitive public tendering, using the two-stage process of
pre-qualification and bidding.
(2) The
Government Agency shall not enter into direct negotiations with any person
without competitive public tendering.
14.
Pre-qualification.
– The Government Agency shall conduct pre-qualification for the project in the
following manner:
(a)
a public notice inviting participation in
pre-qualification for undertaking the project and allowing up to forty-five
days for the preparation of pre-qualification applications shall be published
in at least two national daily newspapers twice within a period of ten days and
shall also be published at least in one other means of mass communication such
as website;
(b)
for projects with a total cost equal to or exceeding
four hundred million rupees, the pre-qualification notice shall also be
published in at least one international newspaper;
(c)
a person who intends to participate in the
pre-qualification shall provide information with regard to his legal, technical,
managerial and financial capacity to undertake the project in such form along
with such particulars as may be specified by the Government Agency;
(d)
in case the person is a consortium, its members and
their roles and proposed shareholding shall be disclosed at the
pre-qualification stage, and the members shall bind themselves that if awarded
the contract, they shall be jointly and severally liable for the obligations of
the private party.
(e)
the Government Agency shall examine the information and
other particulars submitted by the person within thirty days and decide as to
whether such person fulfills the criteria for pre-qualification as laid down by
the Government Agency;
(f)
a person who fulfills the criteria shall be the
pre-qualified person; if less than three persons are pre-qualified, the
Government Agency shall analyze the reasons for this outcome, improve project
structuring, and re-initiate the pre-qualification process for additional
participants until at least two persons are pre-qualified;
(g)
if a consortium is the pre-qualified person, the lead
consortium member shall be allowed to be replaced not earlier than six years
after project commissioning, subject
to approval by the Government
Agency; any other member may withdraw prior to award of the contract or during
the term of the contract, provided that the remaining members are still
legally, technically and financially capable of successfully carrying out the
implementation and operation of the project, or that an acceptable substitute
with equal or better qualifications is replacing such withdrawing member;
(h)
any change in the shareholding of the consortium shall
also be subject to approval by the Government Agency; and
(i)
if the consortium fails to comply with the requirement
of sub-clause (g), the consortium shall cease to be the pre-qualified person.
15.
Bidding.
– (1) After at least two persons have been pre-qualified, the Government Agency
shall issue bid documents to them with an invitation to submit bids within
ninety days.
(2) The bid documents shall include–
(a)
instructions to bidders;
(b)
minimum design and performance standards and
specifications;
(c)
draft PPP agreement;
(d)
bid form, specifying the information required to
evaluate the bid;
(e)
bid security form and performance bond form; and
(f)
any other documents relevant to the project, such as
the feasibility study and environmental
impact assessment.
(3)
To provide clarifications to bidders and discuss the
terms and conditions of the PPP agreement, the Government Agency shall conduct
a pre-bid conference at least sixty days before the bid submission date and
shall issue supplemental notices, as may be necessary.
(4)
If only one valid bid is received on the specified
date, the Government Agency shall undertake market sounding to determine
reasons for the weak competition, restructure the project and government
support accordingly, and conduct re-bidding.
(5)
If only one valid bid is received even after the
re-bidding, the Government Agency shall evaluate it; and depending on results
of the evaluation, the Government Agency shall recommend through the PPP Cell
to the Committee whether to negotiate the PPP agreement with the sole bidder or
withdraw the project from the market and undertake it in the traditional way by
the public sector.
16.
Bid
evaluation. – (1) The Government Agency shall carry out bid evaluation in
two phases within forty-five days.
(2)
In the first phase, the Government Agency shall assess
the technical, operational, environmental and commercial responsiveness of the
bids received, according to the requirements, criteria, minimum standards, and
basic parameters specified in the bid documents, and shall reject
non-responsive bids.
(3)
In the second phase, the Government Agency shall
evaluate responsive bids from the financial viewpoint; and depending on the
type of the project, it shall use one of the following parameters for the
evaluation:
(a)
lowest proposed tariff, toll, fee or charge at the
start of operation of the project if a parametric formula for periodical tariff
adjustment is specified in the bid documents;
(b)
lowest present value of the proposed tariffs, tolls,
fees and charges for the period covered by the PPP agreement if there is no
such formula;
(c)
lowest present value of payments from the Government;
(d)
lowest present value of government subsidy to be
provided for the period covered by the PPP agreement;
(e)
highest present value of the proposed payments to the
Government, such as concession fees, lease or rental payments, fixed or
guaranteed payments or variable payments and percentage shares of revenues for
the period covered by the PPP agreement; or
(f)
any other appropriate financial bid parameters approved
by the Committee upon recommendation of the Government Agency, the PPP Cell, or
the Risk Management Unit.
(4)
The Government Agency may, for the reasons to be
recorded in writing, reject a speculative or unrealistic bid as non-responsive;
such rejection of a bid shall not lead to the termination of the bidding
process.
(5)
After the completion of the bid evaluation, the
Government Agency shall submit through the PPP Cell to the Committee a bid
evaluation report, including a recommendation on contract award.
(6)
The Committee shall, after taking into account results
of the PPP Cell’s review of the bid evaluation report, decide on the contract
award within thirty days from the submission of the bid evaluation report.
(7)
The Government Agency shall announce results of the
bidding and issue a notice of award to the selected private party within ten
days of the Committee’s decision.
17.
Bid security.
– (1) A pre-qualified person shall deposit with the Government Agency a bid
security amount as determined by the Government Agency based on the project
cost.
(2) The
Government Agency shall, within thirty days, return the bid security amount to
all unsuccessful bidders in the prescribed manner.
18.
Government support.
– (1) The Government Agency shall indicate the government support approved by
the Committee for a project in the bid documents.
(2) The government support may take the following forms:-
(a)
administrative support to the private party in
obtaining licenses and other statutory and non-statutory clearances from the
Federal Government, a public sector organization or a Government Agency for the
purposes of the project on such terms and conditions as may be prescribed;
provision of utility connections for power, gas and water at project site;
acquisition of land necessary for the project; and rehabilitation and
resettlement necessitated because of the execution of the project; this type of
support shall be made available for all projects;
(b)
asset-based support such as leasing land or
infrastructure facilities owned by the Government or a Government Agency to the
private party; the need for this type of support shall be determined on case to
case basis;
(c)
direct financial assistance through viability
gap funding; this type of support shall be offered only for projects, which are
economically and socially viable, but not financially attractive enough if
constrained by affordable user levies; its amount shall be determined through
bidding;
(d)
Government guarantees for political risks under
the Government’s control such as changes in the PPP policy, delay of agreed
user levy adjustments, early termination of the PPP agreement with no fault of
the private party, and expropriation; this type of support shall be made available
for all projects; and
(e)
Government guarantees for other risks such as force majeure, demand risk, and default
by a Government Agency on payments for works and services delivered by the
private party (off-take risk); the need for this type of support shall be
determined on case to case basis as part of the risk sharing analysis
undertaken during project preparation.
19.
Unsolicited
proposals. – (1) A person may propose a project to a Government Agency, if
the project is not included in the Provincial priority list mentioned in
section 10(3) and is economically and financially feasible without any
government support in the form of direct financial assistance described in
section 18(c).
(2)
An unsolicited proposal shall be accompanied by a
feasibility study, environmental impact assessment, and draft PPP agreement.
(3)
The Government Agency shall consider the unsolicited
proposal from all aspects including technical and financial, and may modify the
same in consultation with the person who made the proposal.
(4)
The Government Agency shall require the person to
submit details about legal, technical, managerial and financial capability of
the person.
(5)
The Government Agency shall evaluate the unsolicited
proposal and, if its feasibility as well as the legal, technical and financial
qualification of the person is confirmed, submit it through the PPP Cell to the
Committee for approval.
(6)
If the Committee approves the unsolicited proposal, the
Government Agency shall invite comparative bids by following the procedure
described in sections 13 to 17.
(7)
The Government Agency shall give the person who made
the unsolicited proposal first right to match the best bid and if the person
fails to match the bid, the Government Agency shall direct the best bidder to
reimburse to the person reasonable costs incurred in project preparation as may
be specified in the bid documents.
(8)
If valid comparative bids are not received, the
Government Agency shall negotiate the PPP agreement with the person who made
the unsolicited proposal.
20.
Preparation
and negotiation of PPP agreement. – (1) The draft PPP agreement shall form
part of bid documents.
(2)
The draft PPP agreement shall clearly define the legal
relationship between the Government Agency and the selected private party,
their rights and responsibilities including the specific government support for
the project.
(3)
The draft PPP agreement shall contain the following
provisions, as applicable:-
(a)
type of the project;
(b)
term of the PPP agreement;
(c)
scope of works and services to be provided under the
project;
(d)
main technical specifications and performance
standards;
(e)
environmental and safety requirements;
(f)
implementation milestones and completion date of the
project;
(g)
cost recovery scheme through user levies, including
mechanism for their periodical adjustment;
(h)
performance bonds for construction works and operation;
(i)
minimum insurance coverage;
(j)
acceptance tests and procedures;
(k)
rights and obligations of the parties to the PPP
agreement, including risk sharing;
(l)
type and amount of government support;
(m)
transfer of assets at the end of the term of the PPP
agreement (if any);
(n)
warranty period and procedures after the transfer;
(o)
requirements and procedure for variations of the PPP
agreement;
(p)
grounds for and effects of termination of the PPP
agreement, including force majeure;
(q)
procedures and venue for dispute resolution;
(r)
financial reporting by the private party; and
(s)
supervision mechanism of the Government Agency.
(4)
A Government Agency shall not enter into a PPP
agreement unless the procedure specified in this Act has been fulfilled.
(5)
The Government Agency shall ensure conclusion of
contract negotiations with the selected private party within sixty days; the
negotiations shall focus on terms and conditions not specified in the bid
documents; and post-bid changes are not allowed to be made during contract
negotiations in those terms and conditions, which have been described in the
bid documents as binding and have formed part of the bid evaluation.
21.
Project
implementation and operation. – (1) Before signing the PPP agreement with
the Government Agency, the private party may establish, without changing its
shareholding, a special purpose company for implementation and operation of the
project, which shall assume all the rights and obligations of the private
party.
(2)
The private party shall prepare detailed engineering
design and implementation plan in accordance with the main technical
specifications contained in the PPP agreement, and shall submit these to the
Government Agency for approval prior to the start of construction.
(3)
The private party shall build the project in accordance
with the performance standards and specifications contained in the approved
detailed engineering design.
(4)
To guarantee its performance in the construction works,
the private party shall post a bond or furnish a bank guarantee, which shall be
valid up to the acceptance of the completed works by the Government Agency; for
projects, which include operation by the private party, the private party shall
post or furnish another performance bond or bank guarantee upon the acceptance
of the completed works to guarantee compliance with the operating parameters
and standards specified in the PPP agreement.
(5)
Within three hundred and sixty-five days of the signing
of the PPP agreement, the private party shall achieve financial closure for the
project, defined as a legally binding commitment of equity holders and lenders
to provide funding for the entire construction cost.
(6)
The Government Agency shall not allow variations in the
PPP agreement during the implementation and operation of the project unless the
following requirements are met:-
(a)
there is no increase in the agreed tariffs except for
the periodic formula-based tariff adjustments, unless the scope of works or
performance standards are increased;
(b)
there is no reduction in the scope of works or
performance standards, fundamental change in the contractual arrangement or
extension of the term of the PPP agreement, except in cases of breach by the
Government Agency of its obligations;
(c)
there is no additional government guarantee or increase
in the financial exposure of the Government; and
(d)
the variation in the PPP agreement is necessary due to
an unforeseeable event beyond the control of the Government Agency or the
private party.
(7)
The Government Agency shall monitor and evaluate the
project during its implementation and operation to ensure its conformity with
the plans, specifications, performance standards and user levies set forth in
the PPP agreement, and to assess its actual outcomes in terms of infrastructure
services in relation to the expected outcomes.
(8)
The Government Agency shall submit annual reports on
project performance to the PPP Cell.
22.
Setting and
adjustment of user levies. – (1) The Government Agency shall set the user
levies at levels that ensure financial viability of the project by fully
covering the capital, operation and maintenance costs plus a reasonable rate of
return to the private party or the Government Agency.
(2)
Unless specified in the bid documents, the Government
Agency shall determine the user levies through bidding and the user levies
shall be adjusted periodically during the term of the PPP agreement, based on a
formula using official price indices determined in the PPP agreement.
(3)
If the Government Agency keeps the user levies at lower
levels to make the infrastructure services affordable to the end users, the
Government Agency shall compensate the private party for the difference through
viability gap funding.
23.
Dispute
resolution.– (1) In case of any dispute between a Government Agency and a
private party in relation to or arising out of the PPP agreement, the parties
shall resolve the dispute in the following three stages:-
(a)
deliberation between the parties to achieve a
consensus;
(b)
if no consensus on how to resolve the dispute has been
achieved in the first stage, mediation by an independent and impartial person
appointed by the Committee; and
(c)
if no amicable settlement of the dispute has been
reached in the second stage, arbitration in the city of Lahore or any other
place agreed to by the parties in Pakistan or abroad and specified in the PPP
agreement.
(2) The dispute
shall be decided in accordance with the law of Pakistan or under any other law
as may be specified in the PPP agreement.
24.
Termination
of the PPP agreement. – A party to the PPP agreement may terminate the agreement
in the following cases:-
(a)
if the Government Agency fails to comply with
any major obligation specified in the PPP agreement, and such failure is not
remediable or, if remediable, remains uncorrected for an unreasonable period of
time, the private party may issue a prior notice to the Government Agency
specifying the date of transfer of the PPP project to it; in such a case, the
private party shall be compensated by the Government Agency in line with the
PPP agreement; or
(b)
if the private party fails to comply with the
agreed milestone activities, or fails to achieve the prescribed technical and
performance standards, or commits any substantial breach of the PPP agreement,
the Government Agency shall notify the private party in writing and if the
failure is not corrected within the time specified, may terminate the PPP
agreement; in such a case, the Government Agency may either take over the
project and assume all related liabilities or allow lenders of the private
party to exercise their rights and interests as specified in the loan documents
for the project; the lenders may replace the private party on the same terms
and conditions, subject to approval of the substitute by the Government Agency.
25.
Vesting of
the project in the private party. – Subject to the PPP agreement and except
for the build-own-and-operate and rehabilitate-own-and-operate arrangements
described in Schedule II, the completed project may vest in the private party
for a period not exceeding thirty years and on expiry of such period, the project
shall vest in the Government Agency.
26.
Transfer of
the project. – If a project is transferred to the Government Agency in
accordance with the provisions of the PPP agreement or this Act, all the rights
granted under the PPP agreement to the private party in respect of the project
shall stand transferred to the Government Agency.
CHAPTER-IV
MISCELLANEOUS
27.
Disclosure
of generic risks. – (1) A Government Agency shall, as far as possible,
provide in the PPP agreement, or any other ancillary or additional agreement, a
list of generic risks involved in the project along with allocation and
treatment of such generic risks.
(2) The
Government or the Government Agency shall not be liable to any claim of the
private party for a generic risk, which is not specified in the PPP agreement
or any other ancillary or additional agreement.
28.
Public
disclosure. – (1) A PPP agreement or any other ancillary or additional
agreement shall be a public document.
(2)
The Government Agency shall make arrangements for
inspection or copying a PPP agreement or any other ancillary or additional
agreement subject to the payment of the prescribed fee.
(3)
Any person may, subject to the payment of prescribed
fee and any other reasonable restriction, inspect or obtain copies of a PPP
agreement or any other ancillary or additional agreement.
29.
Prescribing
and enforcing standards. – The Government may–
(a)
prescribe and enforce performance standards for a
project including standards of performance of the private party in regard to
the services to be rendered by it to the consumers;
(b)
prescribe quality standards including standards of
materials, equipments and other resources or processes relevant to
infrastructure projects including planning criteria, construction practices and
standards of such facilities, operating standards and maintenance schedules for
regulating the working of the private party to ensure efficiency and adherence
to the prescribed quality standards;
(c)
prescribe the mode of output-based contracting,
performance-based payment systems and output-based procurement procedures;
(d)
establish a uniform system of accounts to be followed
by the private party;
(e)
take steps to promote effective competition and
efficiency in projects using the PPP approach;
(f)
prescribe the mode of conducting public hearing and
consultation with stakeholders; and
(g)
prescribe any other standard for regulating the
infrastructure development through PPP.
30.
Indemnity by
the private party.– The private
party shall indemnify the Government Agency against any defect in design,
construction, maintenance or operation of the project and undertake to
reimburse all costs, charges, expenses, losses and damages suffered by the
Government Agency or an end user due to any such defect.
31.
Recovery of
costs, dues and fees.– (1) The Government Agency may recover a sum due from
the private party, as ascertained through the dispute resolution under this
Act, as if the same is recoverable as arrears of land revenue under the Punjab
Land Revenue Act 1967 (XVII of 1967).
(2) The
Government Agency shall designate an officer as collector to exercise the
powers of collector under the Punjab Land Revenue Act 1967 (XVII of 1967).
32.
Protection
of action taken in good faith. – No suit, claim or other legal proceedings
shall lie against the Committee, a Government Agency or a representative of the
Committee or the Government Agency in respect of anything done or intended to
be done in good faith under this Act or under the rules or the regulations.
33.
Power to
make rules. – The Government may, by notification, make rules for carrying
out the purposes of this Act.
34.
Power to
frame regulations. – Subject to
the rules, the Committee may, with the prior approval of the Government and by
notification, frame regulations to give effect to the provisions of this Act.
35.
Applicability
to Government Agencies. – (1) The provisions of this Act shall apply to a
project of any Government Agency if its estimated total cost, to be incurred by
the Government Agency and the private party for services, land, construction
and equipment, exceeds twenty million rupees.
(2) A
Government Agency may request the Committee to process a project with an
estimated total cost of twenty million rupees or less, and the Committee shall
proceed with the project in the manner as if it falls within its jurisdiction.
36.
Power to amend
a Schedule.– The Government may, by notification, amend a Schedule.
37.
Overriding
provision.– Notwithstanding anything contained in any other law, the
provisions in this Act shall prevail on the provisions of all other laws to the
extent of a PPP project undertaken by any Government Agency.
38.
Transition
provision. – A PPP agreement signed with a private
party prior to the coming into force of this Act shall be valid until the end
of the term established in such agreement.
SCHEDULE- I
[
see sections 2(1) and 3(h) & (o )]
INFRASTRUCTURE SECTORS
(1)
Canals or dams;
(2)
Education facilities;
(3)
Health facilities;
(4)
Housing;
(5)
Industrial estates;
(6)
Information technology;
(7)
Land reclamation;
(8)
Power generation facilities;
(9)
Roads (provincial highways, district roads, bridges or
bypasses);
(10)
Sewerage or drainage;
(11)
Solid waste management;
(12)
Sports or recreational infrastructure, public gardens
or parks;
(13)
Trade fairs, conventions, exhibitions or cultural
centers;
[1][(14)
Urban transport and bus terminal excluding mass transit and metro bus system;]
(15)
Water supply or sanitation, treatment or distribution;
and
(16)
Wholesale markets, warehouses, slaughter houses or cold
storages.
SCHEDULE-II
[
see section 3(r )]
TYPES OF PPP AGREEMENTS
1.
Build-and-Transfer
(BT).- A contractual arrangement whereby the private party undertakes the
financing and construction of an infrastructure project and after its
completion hands it over to the Government Agency. The Government Agency will
reimburse the total project investment, on the basis of an agreed schedule.
This arrangement may be employed in the construction of any infrastructure
project, including critical facilities, which for security or strategic reasons
must be operated directly by the Government Agency.
2.
Build-Lease-and-Transfer
(BLT).- A contractual arrangement whereby the private party undertakes the
financing and construction of an infrastructure project and upon its completion
hands it over to the Government Agency on a lease arrangement for a fixed
period, after the expiry of which ownership of the project is automatically
transferred to the Government Agency.
3.
Build-Operate-and-Transfer
(BOT).- A contractual arrangement whereby the private party undertakes the
financing and construction of an infrastructure project, and the operation and
maintenance thereof. The private party operates the facility over a fixed term
during which it is allowed to collect from project users’ appropriate tariffs,
tolls, fees, rentals, or charges not exceeding those proposed in the bid or
negotiated and incorporated in the PPP agreement, to enable the private party
to recover its investment and operating and maintenance expenses for the
project. The private party transfers the facility to the Government Agency at
the end of the fixed term that shall be specified in the PPP agreement. This
shall include a supply-and-operate situation, which is a contractual
arrangement whereby the supplier of equipment and machinery for an
infrastructure project operates it, providing in the process technology
transfer and training of the nominated individuals of the Government Agency.
4.
Build-Own-and-Operate
(BOO).- A contractual arrangement whereby the private party is authorized
to finance, construct, own, operate and maintain an infrastructure project,
from which the private party is allowed to recover its investment and operating
and maintenance expenses by collecting user levies from project users. The
private party owns the project and may choose to assign its operation and
maintenance to a project operator. The transfer of the project to the Government
Agency is not envisaged in this arrangement. However, the Government Agency may
terminate its obligations after the specified time period.
5.
Build-Own-Operate-Transfer
(BOOT).- A contractual arrangement similar to the BOT agreement, except
that the private party owns the infrastructure project during the fixed term
before its transfer to the Government Agency.
6.
Build-Transfer-and-Operate
(BTO).- A contractual arrangement whereby the Government Agency contracts
out an infrastructure project to the private party to construct it on a
turn-key basis, assuming cost overruns, delays and specified performance risks.
Once the project is commissioned, the private party is given the right to
operate the facility and collect user levies under the PPP agreement. The title
of the project always vests in the Government Agency in this arrangement.
7.
Contract-Add-and-Operate
(CAO).- A contractual arrangement whereby the private party expands an
existing infrastructure facility, which it leases from the Government Agency.
The private party operates the expanded project and collects user levies, to
recover the investment over an agreed period. There may or may not be a
transfer arrangement with regard to the added facility provided by the private
party.
8.
Develop-Operate-and-Transfer
(DOT).- A contractual arrangement whereby favorable conditions external to
an infrastructure project, which is to be built by the private party, are
integrated into the PPP agreement by giving it the right to develop adjoining
property and thus enjoy some of the benefits the investment creates such as
higher property or rent values.
9.
Rehabilitate-Operate-and-Transfer
(ROT).- A contractual arrangement whereby an existing infrastructure
facility is handed over to the private party to refurbish, operate and maintain
it for a specified period, during which the private party collects user levies
to recover its investment and operation and maintenance expenses. At the expiry
of this period, the facility is returned to the Government Agency. The term is
also used to describe the purchase of an existing facility from abroad,
importing, refurbishing, erecting and operating it.
10.
Rehabilitate-Own-and-Operate
(ROO).- A contractual arrangement whereby an existing infrastructure
facility is handed over to the private party to refurbish, operate and maintain
with no time limitation imposed on ownership. The private party is allowed to
collect user levies to recover its investment and operation and maintenance
expenses in perpetuity.
11.
Management
Contract (MC).- A contractual arrangement whereby the Government
Agency entrusts the operation and management of an
infrastructure project to the private party for an agreed period on payment of
specified consideration. The Government Agency may charge the user levies and
collect the same either itself or entrust the collection for consideration to
any person who shall pay the same to the Government Agency.
12.
Service
Contract (SC).- A contractual arrangement whereby the private party
undertakes to provide services to the Government Agency for a specified period
with respect to an infrastructure facility. The Government Agency will pay the
private party an amount according to the agreed schedule.
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