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Observing that there were risks in estimation of revenue streams of projects under public-private partnership mode which might significantly impact the exchequer or consumers, the Comptroller and Auditor General (CAG) on Monday asked the government to ensure all PPP agreements were subject to comprehensive audit by the apex auditor.
"Appropriate clauses in the PPP agreement may be considered by government to ensure that all PPP agreements with private bodies contain provisions for parliamentary oversight by subjecting the accounts of PPPs to comprehensive audit by CAG," CAG said in a report tabled in Parliament.
"There are risks in estimation of revenue streams of projects under PPP arrangement which may significantly impact the exchequer or users of the services, which is normally the public at large," it said.
CAG pointed towards new arrangements that have developed, particularly in infrastructure sector, whereby substantial public fund and/or assets are used to implement public programmes or economic activity by the government through involvement of private parties on medium to long term basis, which are mostly in the form of public private partnership (PPP) or joint ventures, both in the Centre and states.
"These arrangements are, however, outside the traditional legislative oversight by the Parliament. PPP agreements signed so far also do not provide for comprehensive audit by the CAG," the apex auditor said.
RAP SHEET
PowerGrid Corporation
| Has no mechanism to assess use of transmission lines
Air India
| Rs 17 cr spent as hotel expenses for pilots and cabin crew from Mumbai to operate Dreamliner
Public sector enterprises (PSEs)
| 41 central PSEs failed to comply with spending norms on social welfare activities in 2012-13
| Compliance not satisfactory in case of PSEs earning profit between Rs 10 crore and Rs 500 crore
Source: CAG report
