THE
(Act IX of 2010)
C O N T E N T S
Section Heading
Chapter I
Preliminary
1. Short title and commencement.
2. Applicability.
3. Definitions.
Chapter II
Institutional Arrangements
4. PPP Steering Committee.
5. PPP Cell.
6. Risk Management Unit.
7. Government Agencies.
Chapter III
Project Delivery Process
8. PPP arrangements.
9. Project identification and preparation.
10. Project prioritization and approval.
11. Approval of government support.
12. Consideration by the Committee.
13. Selection of the
private party.
14. Pre-qualification.
15. Bidding.
16. Bid evaluation.
17. Bid security.
18. Government support.
19. Unsolicited proposals.
20. Preparation and negotiation of PPP
agreement.
21. Project implementation and
operation.
22. Setting and adjustment of user
levies.
23. Dispute resolution.
24. Termination of the PPP agreement.
25. Vesting of the project in the private party.
26. Transfer of the project.
Chapter IV
Miscellaneous
27. Disclosure of generic risks.
28. Public disclosure.
29. Prescribing and
enforcing standards.
30. Indemnity by the
private party.
31. Recovery of costs, dues and fees.
32. Protection of action taken in good
faith.
33. Power to make rules.
34. Power to frame regulations.
35. Applicability to Government
Agencies.
36. Power to amend a Schedule.
37. Overriding provision.
38. Transition provision.
Schedule
I
Schedule
II
[1]THE
(Act IX of 2010)
[20 July
2010]
An Act to create an enabling environment for
private sector participation in infrastructure development in the
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
(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
(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
(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:-
(a) Minister for Planning and Development; Chairperson
(b) Minister for Finance; Vice Chairperson
(c) Minister for Local Government; Member
(d) Chairman, Planning and Development Member
Board
of the Government;
(e) Secretary to the Government, Member
Finance
Department;
(f) Secretary to the Government, Member
Planning
and Development Department;
(g) Secretary to the Government, Member
Irrigation
and Power Department;
(h) Secretary to the Government, Member
Communications
and Works Department;
(i) Secretary to the Government, Member
Transport
Department;
(j) Secretary to the Government, Member
Housing,
Urban Development and
Public
Health Engineering Department;
(k) Secretary to the Government, Member
Commerce
and Investment Department;
(l) Secretary to the Government, Member
Education
Department;
(m) Secretary to the Government, Member
Health
Department;
(n) Member (PPP), Secretary
Planning
and Development Board
of
the Government;
(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
(2) The dispute shall be
decided in accordance with the law of
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;
(14) Urban
transport including mass transit or bus terminals;
(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.
[1]This Act was passed by the
Punjab Assembly on 12 July 2010; assented to by the Governor of the