The Orissa government has advocated inclusion of a framework for alternate dispute resolution and arbitration for PPP (public private partnership) projects in the draft PPP Rules of Government of India to avoid cumbersome and lengthy litigation processes.
This framework, the state government feels, should be in addition to the provisions proposed for dispute resolution mentioned in Clause 10 in the draft PPP Rules.
“The clause (Clause 10) may be suitable enriched to include dispute resolution mechanism to avoid court cases at the start of the tendering procedure. Suitable conditions may be incorporated and undertakings be obtained from the intending bidders not to resort to court cases on certain specified conditions,” J K Mishra, joint director-PPP (Orissa) said in a letter to Bimla Julka additional secretary, department of economic affairs under Union ministry of finance.
The state has also demanded suitable amendment to Rules 96 and 97 dealing with project management team and empowered review cell respectively to provide flexibility and discretion to the government to do away with these procedural requirements in case of PPP projects of lesser value but having significant social importance.
In the case of small projects, the procedural requirement of formation of so many committees may not be required vis-a-vis the size of the project, the state government suggested.
Rule 96 of PPP Rules dealing with contract management team stipulates that the team will be headed by a contract management director who will be assisted by a team with financial, technical and legal capabilities.
Citing that information availability is often a constraint in the formulation of Value for Money analysis, the state government has stated that Rule 19 should clearly lay down model approaches and supplement it with few examples for carrying out such analysis of different kinds of PPP structures.
Moreover, Rule 94 dealing with treatment of speculative bids may be revisited and made more specific so as to avoid disputes.
The draft Rules talk of risk allocation between the public and private entities, while taking care of the controversial land use issue. Wherever natural resources are provided for a specific use, alternative exploitation of the land will be prohibited and this would be a non-negotiable position, says the draft.
The draft also says every PPP project would be vetted at the Central government level, even where no capital subsidy is expected to obtain clearance from the relevant authorities.
The oversight would extend to the manner of selection of the private entity, procedures observed in releasing payments from time to time and review of quality of service.
