Economy

Two-tier mechanism to monitor public-private partnership projects soon

Our Bureau New Delhi | Updated on July 12, 2012 Published on July 12, 2012




To ensure timely completion of public-private partnership (PPP) projects, an institutional mechanism will soon be set up to oversee contract performance.

Once in place, the Planning Commission will have a central role in ensuring high-quality monitoring and the Union Cabinet will have a chance to monitor every quarter, an official statement issued here said.

The Institutional Mechanism for Monitoring of PPP Projects, cleared by the Union Cabinet on Thursday, will have two-tier system — Projects Monitoring Unit (PMU) and Performance Review Unit (PRU).

At a time when PPPs are in vogue, “it has become necessary to adopt a well-defined institutional structure for overseeing contract performance effectively,” the statement said.

The proposal for the mechanism, put forward by the Planning Commission, has been approved at a time when an increasing reliance is being placed on PPP projects across sectors.

“This is all the more necessary as concessionaires will have an incentive to cut corners whereas the criticism would be faced by the Government,” it added.

According to the decision, the PMU will monitor the performance of PPP projects at the project authority level and the PRU at the Ministry or State Government level. The PMU is to prepare a report to be submitted to the PRU within 15 days of the close of the relevant month.

The report will cover compliance of conditions, adherence to time lines, assessment of performance, remedial measures, imposition of penalties, etc, the statement said.

In addition, the respective Ministries will send quarterly compliance reports to the Planning Commission with a copy to the Finance Ministry. “The Planning Commission, in consultation with the Ministry of Finance, will prepare a summary of these reports along with the recommendations relating to further action/improvements which would be placed before CCI once every quarter for the next two years,” according to the statement.

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Published on July 12, 2012
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