NEW DELHI, July 12:
The Union Cabinet today approved a proposal by the Planning Commission to set up an Institutional mechanism for monitoring and enforcement of provisions in PPP projects.
With increasing reliance being placed on PPP projects across many wings of the government, it had become necessary to adopt a “well-defined institutional structure” for overseeing contract performance effectively, a senior official said.
This was all the more necessary as concessionaires would have an incentive to cut corners whereas the criticism would be faced by government, the official said.
The Institutional Framework requires project authorities to create a two-tier mechanism for monitoring the performance of PPP projects—a PPP Projects Monitoring Unit (PMU) at the project authority level and a PPP Performance Review Unit (PRU) at the Ministry or State Government level.
The PMU is to prepare a report to be submitted to PRU within 15 days of the close of the relevant month.
The report is to cover compliance of conditions, adherence to timelines, assessment of performance, remedial measures, imposition of penalties.
The PRU will review the reports submitted by different PMUs and oversee or initiate action for rectifying any defaults or lapses.
In addition to following the guidelines for the mechanism, the respective Ministries would send a quarterly compliance report to the Planning Commission with a copy to the Finance Ministry.
The Planning Commission, in consultation with the Finance Ministry, would prepare a summary of these reports along with the recommendations relating to further action/improvements which would be placed before Competition Commission of India (CCI) once every quarter for the next two years.
Based on the experience gained, any necessary modifications would be made in the guidelines, the official said.
“This is an important governance mechanism in an area which will see a lot of activity in future,” the official added.
It would also ensure good governance, accountability, efficiency and economy in spending.
“The Planning Commission will have a central role in ensuring high quality monitoring and the Cabinet will monitor every quarter,” the official added. (UNI)
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