New norms for public-private projects

The department of expenditure has firmed up norms for formulation, appraisal and approval of public-private projects (PPP) costing less than Rs 100 crore in the central sector.

Projects costing up to Rs five crore will be appraised by the administrative ministry and projects costing above Rs five crore but less than Rs 25 crore by the standing finance committee (SFC).

Projects costing Rs 25 crore and more but less than Rs 100 crore will be appraised by the expenditure finance committee (EFC) chaired by secretary of the administrative ministry.

The guidelines do not cover proposals relating to the defence ministry, department of atomic energy and department of space.

"These guidelines will apply to all PPP projects sponsored by central ministries, statutory authorities or other entities under their administrative control," government sources told Business Standard.

The composition of SFCs and EFCs would be the same as laid down for appraisal of normal investment proposals costing less than Rs 100 crore except that the department of legal affairs would be represented. "This will ensure close legal scrutiny," an official said.

The guidelines spell out project identification procedure and mention that the sponsoring ministry will identify the projects to be taken up through the PPP route and prepare the feasibility report.

There will also be interministerial consultations. Planning Commission will appraise the project proposal and forward the note to the administrative ministry for further action.