PMO seeks panel for rating agencies

The Prime Minister's Office has asked the department of economic affairs to set up a panel of rating agencies to help the state and central departments select them for rating public-private partnership projects.

The department will discuss the issue with stakeholders at a conference next month. "Since the matter has been raised by the PMO, we will place the issue before stakeholders to decide whether they would like to have such a panel," a source in the finance ministry said.

The finance ministry is working on a risk-rating system for public-private partnership infrastructure projects. Credit rating agencies ICRA, CRISIL, Fitch Ratings and CARE have been asked to develop a common rating methodology to rate such projects, both at pre-bid and post-bid stages. The rating agencies are expected to submit their report by early April.

Once the methodology is ready, central departments and state governments will need to employ a rating agency for assessing the risk of such projects.

At present, they can do so only by inviting expressions of interest from rating agencies through advertisements. However, if the finance ministry finalises a panel of rating agencies, they will not have to conduct technical scrutiny of the agencies, and select one based on the competitive fees these agencies charge for their services.