Home FAQ PPP Basics What Policy governs the PPP in Uttarakhand?
What Policy governs the PPP in Uttarakhand?
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Uttarakhand Government issued a Procurement Rules in 2008 and Public Private Partnership ( PPP) procurement  has been addressed in it. Here are the relevant chapters from Procurement Rules 2008.

Complete Uttarakhand Procurement Rules 2008 can be found here and here.



Public Private Partnership (PPP)

Public Private Partnership (PPP)

66(1) A Department may in the interest of economy and efficiency, decide to outsource certain services being provided by the Government under a PPP arrangement.

(2) The procedure for selection of the private partner shall be such as given in Chapter-4 (Procurement of Services) and Chapter-5 (Outsourcing of Services)

Public Private Partnership (PPP) in Infrastructure Projects

67.(1) Public Private Partnership (PPP) in infrastructure projects typically involve transfer of public assets, delegation of Governmental authority for recovery of user charges, private control of monopolistic services and sharing of risks and contingent liabilities by the Government. Protection of user interests and the need to secure value for public money, as such, demand a more rigorous treatment of these projects.

(2) Predictability and risk mitigation are key to successful Public Private Partnerships. They shall require a framework that can assure the private investor of a market driven return at reasonable levels of risk, and the user of adequate service quality at an affordable cost. The nature of the risks and the involvement of many participants including project sponsors, lenders, Government agencies, and regulatory authorities, the terms of the project agreements as well as the tendering arrangements being complex, should involve detailed legal and contractual agreements that clearly set forth the risks, rewards and obligations of various participants.

(3) Applicability:-

(a) These guidelines will apply to all PPP projects sponsored by Government Departments or State Public Sector Undertaking (PSUs), statutory authorities or other entities under their administrative control.

(b) The procedure specified herein will apply to all PPP projects with capital costs exceeding Rs.5,00,00,000/- (Rs. Five crore) or where the underlying assets are valued at a sum greater than Rs.5,00,00,000/- (Rs. Five crore)

(c) PPP projects with capital cost underlying asset value of less than Rs.5,00,00,000/- (Rs. Five crore) shall be processed as per existing procedures. The Administrative Department shall seek the concurrence of the Finance Department and the Competent Authority before invitation of bids.

(d) Project identification:-

The Administrative Department will identify the projects to be taken up through PPPs and undertake preparation of feasibility studies, project agreements etc. with the assistance of legal, financial and technical experts as necessary.

(4) Inter Departmental Consultations:-

The Administrative Departments may, if deemed necessary, discuss the details of the project and the terms of concession agreement in an inter-department committee and comments, if any, may be incorporated or annexed to the proposal for consideration of the Government/Competent Authority.

(5) In principle approval of Project:-

The Administrative Department shall then seek clearance/concurrence of the Finance Department, Planning Department and from the Competent Authority/appropriate level in the Government as per Rules of Business. While seeking clearance/concurrence of Planning/Finance Department, the Administrative Department, should provide information about the proposed project in Annexure I & II

(6) Expression of Interest:-

Following the 'in principle' clearance of Government/Competent authority, the Administrative Departments may invite expressions of interest in the form of Request for Qualification (RFQ) to be followed by short-listing of pre-qualified bidders.

(7) Two Stage Process:-

The bidding process for PPP projects is divided into two stages. The First stage is generally referred to as Request for Qualification (RFQ) or Expression of Interest (EoI) The objective is to short-list eligible bidders for stage two of the process. In the second and final stage, generally referred to as the Request for Proposal (RFP) or invitation of financial bids, the bidders engage in a comprehensive scrutiny of the project before submitting their financial offers.

(8) Request for Qualification (RFQ):-

The RFQ process should aim at short-listing and pre-qualifying applicants, who will be asked to submit financial bids in the RFP stage. The objective is to identify credible bidders who have the requisite technical and financial capacity for undertaking the project. In order to encourage greater participation from credible domestic and international investors, the RFQ document should not require respondents to incur significant expense in preparing a response. The information sought for the purposes of pre-qualification should generally be restricted to technical and financial capabilities that are relevant to the project. Such information should be precise and quantified so that the process of short-listing is fair and transparent, and does not expose the Government to disputes or controversy.

(9) Number of bidders to be pre-qualified:-

The number of bidders to be pre-qualified and short-listed for the final stage of bidding i.e. the RFP stage needs careful consideration. On the one hand, the number should be adequate for ensuring real competition in bidding. On the other hand, a large number of short-listed bidders could dampen participation by serious bidders, thus diluting competition.

(10) About five pre-qualified bidders should be considered as an international best practice for securing high quality bids. In case short-listing is to be done for two or three projects at the same time, the number of short-listed bidders could be increased to 7 and 10 respectively. For this purpose, a fair and transparent system of evaluation at the RFQ stage would be necessary.

(11) Specifying stringent pre-qualification criteria:-

While stringent eligibility criteria would ensure pre-qualification of bidders well suited for the RFP stage, it would also effectively reduce the number of qualified bidders. A balance, therefore, needs to be drawn for serving the objective of pre-qualifying a reasonable number of suitable bidders for the RFP stage. The principles for determining the eligibility criteria such as technical and financial capacity should be formulated keeping these considerations in view.

(12) Evaluation Criteria:-

The criteria for short-listing of bidders should be divided into technical and financial parameters as stated below:-

(a) Technical Capacity:-

The applicant should have acquired sufficient experience and capacity in building infrastructure projects. This can be measured either from the construction work undertaken/commissioned by him, or from revenues of Build Operate Transfer ( BOT)/ Build Own Operate Transfer ( BOOT) etc. projects, or from both, during the 5 years preceding the application date. Eligibility conditions, as necessary, may also be stipulated in respect of Operation and Maintenance (O&M) experience. The technical capacity of bidders can be assessed on the following parameters:-

(i) Project/Construction Experience: Experience on eligible projects in the specified sector or other core sectors should be considered for determining the technical capacity of the applicant.

(ii) Operation and Maintenance (O&M) Experience: The applicant should have experience of five years or more in operation and maintenance (O&M) of projects in the specified sector. In the absence of such experience, the applicant may be required to enter into an operation and maintenance (O&M) agreement with an entity having equivalent experience, failing which the concession agreement would be liable to termination. While suggesting this arrangement, it is proposed to provide sufficient flexibility for modifying these requirements to suit the needs of individual sectors/projects.

(b) Financial Capacity:-

Applicants should have a minimum net worth equivalent to 25% of the estimated capital cost of the project for which bids are to be invited. In the case of projects with an estimated cost of Rs. 500,00,00,000 (Rs five hundred crore) or more, the requirement of net worth could be suitably reduced, but should be no less than 15%. This would ensure that pre-qualified applicants have sufficient financial strength to undertake the project.

(c) Eligibility of Experience:-

The members of the consortium, who claim experience or net worth in the RFQ must hold at least 26% of the consortium's equity. This condition is necessary for ensuring that only the experience of those members who have a substantial stake is counted for the purposes of pre-qualification, and members with small equity holding are not added with the sole objective of improving the ranking in pre-qualification.

(d) Technical evaluation at the RFP stage:-

(i) Technical proposals of different bidders could vary significantly. Apart from the difficulties in evaluating diverse proposals on a common set of parameters, such evaluation also implies that instead of the government determining the assets and services to be provided by the selected bidder, it is the technical bid that would tend to guide the outcome. Logically, the Government should set the technical parameters and ask for financial bids only, leaving sufficient flexibility for bidders to design and engineer the project in a manner that conforms to pre-determined standards and specifications, including service outputs.

(ii) In case of exceptionally complex projects where the project authority determines that the bidders must submit their technical proposals/ plans, the requirements thereof should be specified in detail and such proposals/ plans should be invited at the qualification stage, either along with the initial applications or at an intermediate stage preceding the bid stage. Only pre-qualified applicants should be invited to participate in the bid stage, which shall only consist of an invitation to submit financial offers.

(13) Formulation of Project Documents:-

(a)The documents that would need to be prepared would, inter-alia, include the various agreements to be entered into with the concessionaire detailing the terms of the concession and the rights and obligations of the various parties. These project documents would vary depending on the sector and type of project. Typically, a PPP will involve the concession agreement that will specify the terms of the concession granted to the private party and will include the rights and obligations of all parties. There could be associated agreements based on specific requirements.

(b)Request of Proposals (RFP), i.e. invitation to submit financial bids, should normally include a copy of all the agreements that are proposed to be entered into with the successful bidder. After formulating the draft RFP, the Administrative Department would seek clearance of the Expenditure Finance Committee (E.F.C) and the competent authority before inviting the financial bids.

(14) Clearance by Expenditure Finance Committee(E.F.C.):-

(a)The proposal for seeking clearance of the Expenditure Finance Committee (E.F.C.) shall be sent in 3 copies in the format specified at Annexure-III & IV along with copies of all draft project agreements and the Project Report. Before reference to the Expenditure Finance Committee (E.F.C.), the views of the Law Department and other related Departments should have been obtained by the Administrative Department.

(b)The Expenditure Finance Committee (E.F.C.) would comprise of the following:-

(i)Principal Secretary/Secretary Finance- Chairperson

(ii)Principal Secretary/Secretary Planning

(iii)Principal Secretary/Secretary Law

(iv)Principal Secretary/Secretary Administrative Department sponsoring the project.

(c.) Committee may co-opt experts, if necessary. The E.F.C. would be serviced by the Planning Department. A special PPP cell will be set up for this purpose in Planning Department.

(d.)After clearance of the Finance Department, the Administrative Department will seek the prior approval of the Competent Authority/appropriate level in Government as per Rules of Business.

(e.)Financial bids may be invited after final approval of the Competent Authority/appropriate level has been obtained.