PPPAC Guidelines

The Hon’ble FM on 28th June, 2021 while announcing measures for Economic
Relief from COVID-19 Pandemic, observed that the “Current process for approval
of Public Private Partnership (PPP) projects is long and involves multiple levels of
approval. A new policy will be formulated for appraisal and approval of PPP
proposals and monetization of core infrastructure assets, including through InvITs.
The policy will aim to ensure speedy clearance of projects to facilitate private
sector’s efficiencies in financing construction and management of infrastructure.”
The simplification and delegation of the appraisal and approval mechanism for the
PPPAC Guidelines as well as for VGF Scheme and Guidelines is proposed in
pursuance for implementation of the aforesaid announcements.

Guidelines for Appraisal of Central Sector Public Private Partnership Projects in

Infrastructure

Provision of quality infrastructure is critical for the economy to attain a higher growth
trajectory on a sustained basis. While stepping up public investments in
infrastructure, the Government has been actively engaged in developing the
appropriate policy framework for private investment in infrastructure projects and
simultaneously keeping adequate checks and balances through transparency,
competition and regulation. Consequently, Public Private Partnerships (PPPs) are
being encouraged for execution and operation of infrastructure projects. In addition
to leveraging public capital to attract private capital and undertaking a larger shelf
of infrastructure projects, PPPs bring in the advantages of private sector expertise
and cost reducing technologies as well as efficiencies in operation and
maintenance.
PPP is an ever-evolving process where relationship between the public and private
sectors alters from time to time. There are a number of legal, social, economic,
political and administrative issues that have a bearing on the success of a PPP in
infrastructure and hence their development requires an enabling eco-system
involving support through proactive planning, policy formulation and regulatory
measures.
PPPAC Guidelines
Guidelines were notified by GoI in 2006 for formulation, appraisal and
recommendation of Central Sector PPP projects in Infrastructure to ensure speedy
appraisal of projects, adopt international best practices and have uniformity in
appraisal mechanism and guidelines. However, in the past 15 years, a lot of activity
and development has been witnessed in the PPP landscape and it appears that
the extant Guidelines require amendment to address these changes. Some of the
issues requiring amendment of the Guidelines have been identified as follows: -
• Multi-Tier Appraisal Requirement: -
 At present, the appraisal mechanism prescribed under the Guidelines is m
ulti-tiered with multi-level mutually overlapping system of appraisal based
on Project Cost –

• Less than Rs.100 Crore by SFC of Administrative Ministry

• Rs.100 Cr to Rs. 250 Crore initially by SFC and then by two-member co
mmittee
• Above Rs. 250 Crore by PPPAC
• Delegation of Powers to SFC require revision:
The delegation of appraisal powers prescribed under the Guidelines
have not been revised since 2007 (when these were revised from
Rs.100 Crore to Rs.250 Crore for the PPPAC). The current delegation
of powers for appraisal by SFC is out of sync with the corresponding
DoE delegation of powers for appraisal and approval of projects
undertaken on other than PPP modes. This results in stifling of flexibility
to the Administrative Ministry in structuring project contours for small
projects according to the requirements.
• No clear provision for Single Stage Two envelops bidding Process: -
The existing Guidelines prescribe a two-stage appraisal process. As
such, Single Stage two Envelope bid mechanism is not explicitly
mentioned under the extant Guidelines. However, in the present
scenario, it has been observed that there is a perceptible shift towards
adoption of the Single Stage process rather than the Two Stage Process
depending upon the nature of the project.
• Two Stage Appraisal Process: -
At present, the appraisal process of the PPPAC mandates a two-stage
appraisal, In Principle Appraisal at RFQ Stage and Final Appraisal at
RFP stage. Many a times this leads to delays in project being bid out
leading to loss of business opportunity.
• Revalidation of even minor changes is required by the PPPAC/SFC:
Requirement of revalidation of Appraisal for every small change in
project documents post appraisal of PPPAC/SFC
• Multiple redundant project Appraisal formats capturing Basic
information.
• No provision of structured appraisal of the project by an agency
independent of the ministry
At present, each member entity of the PPPAC give comments. However,
there is no structured project appraisal template is available for appraising
the project as a whole including from financial and viability angle.
 • Procedure for amendment to the guidelines is not defined

Changes proposed to address the Issues and streamlining and simplifying

the PPPAC appraisal process
In order to address these issues, the following changes/amendments have been
proposed in the Guidelines: -
• Only two-tier system of appraisal based on Project Cost has been
incorporated, viz., PPPAC and SFC. There will be no requirement of a
further appraisal by a Two Member Committee as in the case of existing
Guidelines
• Delegation of powers with projects having TPC less than Rs. 500 Crore to
be appraised by SFC of Administrative Ministry; and projects with TPC
above Rs. 500 Crore by PPPAC.
• All deviations from MCAs after recommendation of the PPPAC to be
approved at the level of Minister-in-Charge itself. This will also give
necessary flexibility to the Administrative Ministries to structure projects.
• In the revised formulation, Appraisal of PPPAC/SFC is required only once,
i.e., before floating RFP. This will eliminate the time lag between In Principle
and Final Appraisal of PPPAC/SFC and will expedite the project. In addition,
an option of Single Stage Two Envelop bidding mechanism has also
included in the guidelines. Ministries are now required to approve MCAs
within a specific timeline.
• A template has been prepared for structured appraisal of the project by the
NITI as a whole including from financial and viability angle.
• Revalidation of appraisal by the PPPAC/SFC is required only in case of
major deviations having a quantified impact in terms of TPC of the project.
This will give the necessary flexibility to the Administrative Ministry for
project tweaking and at the same time reduce project reconsiderations. This
will also eliminate any delays in project bidding as many a times minor
changes are required post appraisal of the project based on stakeholder
considerations/ pre bid clarifications.
• Single Detailed and comprehensive Appraisal format. Multiple appraisal
formats have been re-engineered and consolidated into a single
comprehensive format for better clarity and proper appraisal. Further,
Improved appraisal format with identified roles and responsibilities will
improve the quality of Appraisal. Further, several new appraisal criteria such
as Public Sector Comparator Analysis etc. have also been included.
• Procedure for future amendments to the Guidelines has also been prescribed.
Abbreviations

BOLT Build Operate Lease Transfer

BOOT Build Operate Own Transfer

BOT Build Operate Transfer

CCEA Cabinet Committee on Economic Affairs

COD Commercial Operation Date

CPSEs Central Public Sector Enterprises

DBFOT Design Build Finance Operate Transfer

DEA Department of Economic Affairs

DoE Department of Expenditure

EM Empowered Mechanism

GoI Government of India

IRR Internal Rate of Return

InvIT Infrastructure Investment Trust

IM Investment Manager

MCA Model Concession Agreement

NHAI National Highways Authority of India

NHDP National Highways Development Project

O&M Operations & Maintenance

PM Project Manager

PAMD Project Appraisal and Monitoring Division

PIB Public Investment Board

PPP Public Private Partnership

PPPAC Public Private Partnership Appraisal Committee

PPPAU PPP Appraisal Unit

RFP Request for Proposals

RFQ Request for Qualification

REIT Real Estate Investment Trust

SFC Standing Finance Committee

SPV Special Purpose Vehicle

SEBI Securities and Exchange Board of India

VGF Viability Gap Funding

Definitions – The following terms shall have the generic meaning assigned to them, except where
specifically defined in any of the Guidelines/Schemes.

“Appointed Date” means the date on which the Concession Agreement comes into full force and
effect in accordance with the terms outlined therein.
“Bid” means the submission made in response to the RFP;
“Bidder” means an entity which has submitted or intends to submit a Bid in response to the RFP;
“Bid Security” means a security furnished by the Bidder to the Contracting Authority to secure the
performance of any obligation under the RFP and includes such arrangements as bank guarantees,
surety bonds, stand-by letters of credit, cheques on which a bank is primarily liable, cash deposits,
promissory notes and bills of exchange;
“Brownfield Asset” means an operational infrastructure project that is generating revenue after
achieving its commercial operation date

“CAPEX” Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and
maintain infrastructure.

“Concessionaire” means the entity, other than the Contracting Authority, signing the Concession
Agreement.
“Concession Agreement” means the contract entered into between the Contracting Authority and
Selected Bidder for implementing a PPP Project;
“Conditions Precedent” mean the obligations which the Contracting Authority or the Concessionaire
may be required to fulfill prior to financial close/appointed date of the PPP Project, unless waived in
writing by the relevant party in accordance with the terms of the Concession Agreement;
“Contingent Liability” means a liability accruing to a Contracting Authority through the Concession
Agreement or PPP Project on the occurrence or non-occurrence of an uncertain future event.
“Contracting Authority” means the Appropriate Government, or an agency of the Appropriate
Government, or a statutory authority or an entity under control of the Appropriate Government, or a
Central Public Sector Undertaking, which is a signatory to the Concession Agreement.
“Contract Management” means activities of the Contracting Authority relating to supervision of a
PPP or Concession Agreement;
“Empowered Mechanism” means an empowered committee with delegated powers as defined
under these Guidelines for Monetization of Central Sector Core Assets

“Harmonized Master List of Infrastructure Sub Sectors” List of Infrastructure sub sectors as
notified by DEA from time to time.

“InvIT” means a trust registered with SEBI under the SEBI (Infrastructure Investment Trust),
Regulations 2014

“Lead Financial Institution” means the financial institution (Fl) that is funding the PPP project, and
in case there is a consortium of FIs, the Fl designated as such by the consortium.

“Lease” means an agreement whereby the lessor confers to the lessee the right to use an asset for
an agreed period of time in exchange for a consideration
“Model Concession Agreement(s)” or “MCA” are documents approved by the Minister-in-Charge
of the concerned Ministry/Department by the Cabinet, after obtaining concurrence of all such
Ministries/Departments, as are required to be consulted in terms of Rule 4 of the Government of India
(Transaction of Business) Rules, 1961;
“Mandatory Component of a project” means that obligation relating to the asset in a concessional
agreement, any default in construction or operation & maintenance of which leads to termination of
the concession agreement.

“OPEX” These are the expenses incurred on a routine basis for normal business operations.

“PPP Projects” mean projects proposed or being implemented on a Public Private Partnership basis;
“Performance Security” means the bank guarantee furnished by the Concessionaire to the
Contracting Authority for the performance of its obligations under the Concession Agreement at the
rate notified by the Department of Expenditure (DoE) from time to time;
“Public Private Partnership” or “PPP” means an arrangement between the Appropriate
Government or a statutory entity or a government-owned entity or Central Public Sector Undertaking
on one side and a private entity on the other, for the provision of public assets and/or public services,
through investments being made and/or management being undertaken by the private entity, for a
specified period of time, where there is well defined allocation of risk between the private entity and
the public entity and the private entity performances conform (or are benchmarked) to specified and
pre-determined performance standards, measurable by the public entity or its representative.
“Private Sector Company” means a company which is not a Government Company” as defined
under section 2(45) of the Companies Act, 2013.

“Project Term or Concession Period” means the duration of the contract or concession agreement
for the PPP project.

“Project Value” for the purpose of these guidelines means:

 - in case of PPP Projects where the private entity is expected to make capital investments,
the value of the mandatory component of asset or facility to be constructed including the
cost of land, if the cost of land is to be borne by the private entity; or
- in case the PPP Projects where the private entity is not expected to make substantial
capital investments, the current replacement value of asset or facility, whose operation
and maintenance is proposed to be the mandatory responsibility of private entity.

“Project Development Expenses” The expenses incurred by the Sponsoring Authority in respect
of development of a Project.
“Replacement Value” Replacement cost/value is the price that an entity would have to pay to
replace an existing asset with a similar asset at current market prices.
“Request for Proposal” or “RFP” means the Tender Document prepared and issued;
“Request for Qualification” or “RFQ” means the Tender Document prepared and issued;
“REIT” means a trust registered with SEBI under the SEBI (Real Estate Investment Trust),
Regulations 2014

“Sponsoring Authority(ies) (SA)” means the entity which owns the project/assets and/or provides
resources and support for the project and includes Central Government Ministries/Departments,
State Governments, Local Government Bodies, Public Sector Undertakings (PSUs), statutory
authorities or other entities under their administrative control.

“SPV” means a company incorporated under the Companies Act 2013

“Tender Documents” mean, as applicable, the REOI, RFQ, RTP, RFP, draft Concession
Agreement and any addenda or corrigenda issued by the Contracting Authority in respect thereof
as part of the Tender Proceedings;

“Technical Close” The stage of execution of concession agreement, between the private sector
developer and the Sponsoring Authority or its agencies, subsequent to selection of the private sector
developer through a bidding process

“Transaction Advisors” Consultants hired through a transparent system of procurement by the

sponsoring authorities to assist them in designing the project and/or providing technical, financial
and legal input for the project design, and providing advice for the management of the process of
procuring the private sector partner for the PPP project.

“Total Project Cost” All costs and expenses required for construction of a project, which includes
construction cost, compensation cost, incidental expenses, etc.
“Viability Gap Funding or Grant” means a grant one-time or deferred, provided with the objective
of making a project commercially viable.
I. Guidelines for Formulation, Appraisal and Recommendation of Central Sector Public
Private Partnership Projects in Infrastructure

1. Introduction

1.1 Provision of quality infrastructure is critical for the economy to attain a higher growth trajectory on
a sustained basis. While stepping up public investments in infrastructure, the Government has
been actively engaged in developing the appropriate policy framework for private investment in
infrastructure projects and simultaneously keeping adequate checks and balances through
transparency, competition and regulation. Consequently, Public Private Partnerships (PPPs) are
being encouraged for execution and operation of infrastructure projects. In addition to leveraging
public capital to attract private capital and undertaking a larger shelf of infrastructure projects,
PPPs bring in the advantages of private sector expertise and cost reducing technologies as well
as efficiencies in operation and maintenance.

1.2 PPP is an ever-evolving process where relationship between the public and private sectors alters
from time to time. There are a number of legal, social, economic, political and administrative
issues that have a bearing on the success of a PPP in infrastructure and hence their development
requires an enabling eco-system involving support through proactive planning, policy formulation
and regulatory measures.

1.3 The transactions involved in implementing PPP projects are complex and critical. The high initial
investments, transfer of public assets to the private sector partner for the concession period, the
need to balance the divergent needs of the commercial private interests with the objectives of
inclusive growth underline the criticality of project structuring. In order to make the projects
commercially viable, often, Government viability funding support may also be required. To
achieve economically optimum gains from private participation in infrastructure projects, fair
allocation of risks amongst the private and Government partners and balancing of gains to both
the parties is crucial. Due diligence is also essential given the substantial contingent liability that
could devolve on the State in such projects.

1.4 PPP Infrastructure assets entail a clear need for the government to retain a degree of oversight
and control by way of either contractual mechanisms or regulations. This is because the projects
around these assets typically involve:

• Transfer of public assets including land

 • Delegation of governmental authority to collect and appropriate user charges that are levied
by force of law and must therefore be ‘reasonable

• Protection of user interests and the need to secure value for public money

• Provision of services to users in a monopoly or semi-monopoly situation, which imposes a

special obligation on the government to ensure adequate service quality

• Sharing of risks and contingent liabilities by the government, as applicable.

1.5 Recognizing these requirements, guidelines are notified by GoI for formulation, appraisal and
recommendation of Central Sector PPP projects in Infrastructure to ensure speedy appraisal of
projects, adopt international best practices and have uniformity in appraisal mechanism and
guidelines.

1.6 In the light of the above, these Guidelines lay down a system for Formulation, Appraisal and
Recommendation of Central Sector Infrastructure Projects to be undertaken through Public
Private Partnership (PPP).

2. Applicability

2.1 These guidelines will apply to all PPP projects in infrastructure sectors (as per Harmonized Master
list of Infrastructure sub sectors) sponsored by Central Government Ministries/Departments,
Central Public Sector Undertakings (CPSUs), Statutory Authorities or other entities under their
administrative control, unless exempted so by the competent authority.

3. Project Identification

3.1 The sponsoring Ministry 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.

3.2 Projects having commercial viability may be preferred to be taken up in PPP mode, rather than
EPC mode. However, even projects which are economically desirable but commercially unviable
may be taken in PPP mode with VGF support.

3.3 Projects fetching benefits for public at large may be the preferred to be undertaken in PPP mode
rather than projects serving only a selected small section of the society.

3.4 Projects meant for serving only a selected small section of the society, may be undertaken in PPP
mode only if it brings good economic rate of return (EIRR) and open up economic development
in that area, which would otherwise not be possible
4. Indicative features of PPP project Structuring

4.1 Transaction – Transferred to a single or a consortium of developers and / or investors, by way of

defined contractual frameworks

4.2 Consideration - Upfront and/or periodic payments

4.3 Target Investor Class - Generally, infrastructure developers, strategic investors with direct
involvement / oversight in operations

4.4 Selection modes - Through an open competitive bidding process and as per prescribed guidelines
of Government

4.5 Contractual aspects - Key performance indicators and clearly defined performance regime with
commensurate incentive or penalty mechanisms, suitable exit provisions, termination and force
majeure provisions

5. Reserve Price

5.1 The Project Sponsoring Ministries/Departments should undertake due diligence about decision
to keep the reserve price keeping in mind having regard to which option will fetch the maximum
value for the government.

5.2 In case, it decides to have the reserve price, the Reserve Price should preferably be determined
after submission of financial bids but before opening of bids.

5.3 The Sponsoring Ministries/Departments should undertake due diligence about decision to make
the reserve price public keeping in mind which option will fetch the maximum value for the
government.

6. Institutional Structure for Appraisal and Recommendation of PPP Projects

6.1 Committee for appraisal and recommendation of the projects would be as detailed in Annexure - V
of these Guidelines.

6.2 The Committee would be serviced by the Committee Secretariat in the respective
Ministry/Department.

6.3 The Committee may co-opt experts as necessary.

7. Bid and Concession Documents

7.1 Sponsoring Ministries/Departments should ensure that the projects submitted for appraisal of
Committee are based on duly approved MCAs (list is attached at Annexure – IV).
7.2 For projects where MCA is not approved, projects may be based on Draft CAs of NITI Aayog
(erstwhile Planning Commission) (list is attached at Annexure – IV). However, efforts should be
made by the Ministry/Department to convert the existing Draft CAs to MCAs before submitting
the proposal for consideration of the Committee. For projects where neither the MCAs nor any
Draft CAs are available, the Ministry/Department should attempt to prepare and approve MCAs
before submitting the project proposal for consideration of the Committee.

7.3 In case of use of the existing Draft CAs/ MCAs without approved RFQ/RFP, Sponsoring
Ministries/Departments should ensure that the projects submitted for consideration of Committee
are based on model RFQ/RFP prepared by the DoE.

7.4 Formulation and approval of MCAs should be completed within six months of notification of these
Guidelines. The Committee may not consider subsequent project proposals in the absence of
approved MCAs.

8. Inter-ministerial Consultations

8.1 The Administrative Ministry may, if deemed necessary, discuss the details of the project and the
terms of concession agreement in an inter-ministerial consultative committee and comments, if
any, may be incorporated or annexed to the proposal for consideration of the Committee.

8.2 There could be projects, which involve more than one Ministry/ Department. While considering
such projects, Committee may seek participation of such Ministries/Departments.

9. Appraisal by the Committee

9.1 Appraisal of the Committee is required only once before floating RFP (Request for Proposals),
i.e., invitation to submit financial bids. The Administrative/Sponsoring Ministry/Department shall
appraise the project from all angles including financial viability of the project before submitting the
same to the Committee.

9.2 The proposal for seeking appraisal of Committee shall be sent (in six copies in both hard and soft
form) to the Committee Secretariat in the format specified at Annexure - I along with copies of
all documents as mentioned in the aforesaid Annexure.

9.3 The Administrative Ministry/Department shall submit clearly spelt out deviations in the concession
agreement vis-à-vis, the MCAs/ Draft CAs and Model RFP.

9.4 Committee Secretariat will circulate the copies of Committee Memo and deviation statement and
other associated documents to all Committee Members for appraisal.
9.5 Ministry of Law and Justice, Department of Legal Affairs will appraise the concession agreement
for a careful legal scrutiny.

9.6 NITI Aayog will provide the independent project appraisal note in the format as given in Annexure
– II.

9.7 All Committee Members will forward their respective project appraisal note to the Sponsoring
Authority directly for their replies, under intimation to Committee Secretariat. The Sponsoring
Authority will forward its replies on the comments of Committee members to all members directly,
under intimation to Committee Secretariat.

9.8 The Committee Secretariat shall convene a Meeting of the Committee for consideration of the
project proposal.

9.9 The Committee Secretariat shall submit Project Appraisal Notes the comments of all Committee
Members, and replies thereon of the Sponsoring Authority to the Committee in its Meeting for its
consideration.

9.10 The Sponsoring Authority shall make a presentation to the Committee on the proposal, Appraisal
Notes of the committee members and replies thereof including deviations from model documents.

10. Recommendation of the Committee

10.1 Committee will consider and decide the PPP Project proposal of the Administrative
Ministry/Department.

10.2 Committee will either recommend the proposal (with or without modifications) to the Competent
Authority for Appraisal or request the Sponsoring Authority to make necessary changes for further
consideration of Committee.

11. Invitation of Bids

11.1 Financial bids may be invited after approval of the Competent Authority has been obtained.
However, pending approval of the Competent Authority, financial bids could be invited after
recommendation of Committee has been conveyed.

12. Revalidation of ‘Recommendation’ of Committee

12.1 Revalidation of its Recommendation by the Committee is not required if post Committee
recommendation:

• Impact of Changes in the following project particulars is less than 20% of originally
recommended: Project cost, Concession terms like concession period, termination payment,
 development rights, penalty clauses, tariffs/ user charges.

• Change in date/time period for any timebound actions like appointed date, financial close,
construction period, etc.

• Non-Substantial change in risk allocation.

12.2 Any changes/modification in the project proposal with the overall objective of making project
successful or within the above-mentioned limits or other project particulars not mentioned above,
shall be appraised at the level of Secretary of the Administrative Ministry/Department without any
need of revalidation by the Committee.

13. Approval by the Competent Authority

13.1 Once the project is recommended by the Committee, the Sponsoring Authority may follow the
procedure for the approval of the project as per the delegation of powers laid down by Department
of Expenditure from time to time.

13.2 The deviations from the MCAs as recommended by the Appraisal Committee shall be approved
at the level of Minister-in–Charge of the Administrative/ /Department, before submitting the
proposal for approval of Competent Authority. However, for project proposals where the Minister-
in-Charge of the Administrative/Sponsoring Ministry/Department is the Competent Authority for
approval of the project, approval for such deviations from MCAs may be taken up simultaneously
with the project proposal.

13.3 At the time of seeking approval from Competent Authority, the Administrative
Ministry/Department would be required to specifically state all changes in project (if any) made
post recommendation of Committee.

14. Time Frame

14.1 The time frame for the appraisal of projects under the above procedure is at Annexure III.

15. Exemption from the above Procedure

15.1 Ministry of Defense, Department of Atomic Energy and Department of Space will not be covered
under the purview of these guidelines.

15.2 Ministry/Department with enhanced delegation of Financial Powers by the Cabinet are exempted
from following the threshold financial criteria for recommendation of the project by the Committee
up to the extent of the enhanced delegated financial powers.

16. Procedure for Amendment to the Guidelines

16.1 These Guidelines may be amended on the recommendations of PPPAC with the approval of the
Finance Minister.
 Annexure – I

Memo and List of Documents for Consideration of the Committee

S. Item Document Description

No Name&
. Clause/Para
No. &
Pg. No.
I General Information
(a) Name of the Project
(b) Location (State/District/Town)
(c) Administrative Ministry/Department
(d) Name of Sponsoring Authority
(e) Name of the Implementing Agency
II Project Description
(a) Brief description of the scope of the project (Please state in
about 200 words)
(b) Rationale for undertaking this project. Does this sector require
Government Intervention? Whether such services are already
being provided or can be provided by Private Players without Govt.
intervention?
(c) Nature and time period of Concession to be granted. Type of PPP
(BOT, BOOT, BOLT, OMT etc.)
(d) Rationale for the proposed period of Concession and PPP
Model/Type of PPP. Can other modes like EPC etc. or other
models of PPP may fetch better value. Public Sector Comparator
Analysis to be provided.
(e) Project Implementation Schedule (PIS);
(f) Conditions precedent, if any, for the concession to be effective
III Project Financials
(a) Estimated capital costs with break-up under major heads of
expenditure. Also indicate the basis of cost estimation along
with year of PAR rates, costs escalation methodology, etc.
(b) Phasing of investment (in terms of period and physical &
financial milestones)
(c) Sources of financing (equity, debt, mezzanine capital etc.) along
with their respective cost and also WACC
(d) Have any FIs been approached? If yes, their response may be
indicated.
(e) Indicate the revenue streams of the Project (annual in - flows
over project life). Also indicate the underlying assumptions
(f) Indicate the O&M Costs of the Project (annual outflows over
project life). Also indicate the underlying assumptions.
(g) Indicate the Net Present Value (NPV) of cash flows with 10
percent discounting (Net present value (NPV) is the difference
S. Item Document Description
No Name&
. Clause/Para
No. &
Pg. No.
between the present value of cash inflows and the present value
of cash outflows over the Concession period.)
(h) User Charges/Tariff:
i. Who will fix the User Charges/Tariffs?
ii. Is there any Tariff Regulator / Statutory Body for the Sector,
or any Scheme of GoI / State Government? The
legal/regulatory provisions in support of User Charges/Tariff
to be provided. (attach the relevant rules/notification)
iii. If there is no Tariff Regulator / Statutory Body for the Sector,
or any Scheme of GoI / State Government then how the User
Charges/Tariffs be determined
iv. Whether there will be Pre-Determined User Charges/Tariffs?
and Where no Tariff Regulator / Statutory Body or any Scheme of
GoI / State Government is available then whether such User
Charges/Tariffs shall be mentioned in the Concession Agreement
along with the escalation matrix.
v. If so, the details thereof.
(i) If land parcel is proposed to be given as a concession, then: -
i. Proposed FAR for the land parcel
ii. Maximum allowed FAR as per norms.
iii. Total land area (in sq. ft.).
iv. What is the estimated value of the land
v. Details of valuation methodology adopted
IV Construction and O&M
(a) Likely construction period
(b) Monitoring of construction; whether appointment of an
independent agency/engineer is contemplated
(c) Penalties for violation of prescribed O&M standards
V Project Viability and GoI Support
(a) Financial IRR, Economic IRR (if computed) and Financial
Viability of the project along with Assumptions
(b) Nature and extent of estimated Premium/VGF in the bids along
with assumptions
(c) Contingent liabilities of the government:
• Provisions, if any for compulsory buy-back of assets
upon termination/expiry
• Maximum Termination Payment for Government/Authority
Default
• Maximum Termination Payment for Concessionaire
Default
• Specify any other penalty, compensation or payment
contemplated under the agreement
• Any other GoI guarantees being sought
(d) Provisions for change of scope of the project and the financial
 S. Item Document Description
No Name&
. Clause/Para
No. &
Pg. No.
burden thereof
(e) List of all envisaged payouts/receivables by the
Authority/Sponsoring Agency/Implementing Agency over the
concession period
(f) What would be the bidding parameter?
VI Clearances Required
(a) Status of environmental clearances
(b) Clearance required from the State Government and other local
bodies
(c) Status of Land/RoW to be transferred/leased out to
Concessionaire
(d) Other support required from the State Government
VII Particulars of Concession Agreement
(a) Is the project based on duly approved MCAs? If no, then
whether any other Draft CA exists for the project
(b) Please attach deviation statement from MCA or Draft CA, Model
RFP.
(c) Provisions, if any, for mitigating the risk of lower revenue
collection
(d) Provisions relating to escrow account, if any
(e) Provisions relating to insurance
(f) Provisions relating to audit and certification of claims
(g) Provisions relating to assignment/substitution rights
relating to lenders
(h) Provisions relating to change in law
(i) Provisions relating to competing facilities, if any
(j) Specify the proposed Dispute Resolution Mechanism
(k) Specify the proposed governing law and Courts of jurisdiction
(l) Mechanisms to handle spillover effect/super-profits and revenue
sharing
VIII Additional Particulars to be furnished if the project
requires VGF support other than VGF scheme
(a) Can the user charges/tariffs be increased for reducing the
viability gap?

(b) Can the concession period be increased for reducing the

viability gap?
(c) Can the total project costs be restricted or phased out for
reducing the viability gap?
(d) Will the VGF be used as a capital grant at the stage of project
construction and/or Opex? Provide details
(e) Is there any other Scheme of the Central Government under
which this project is eligible for financial assistance?
(f) Will the bidding parameter be the minimum VGF required? If no,
 S. Item Document Description
No Name&
. Clause/Para
No. &
Pg. No.
please indicate the bidding parameter(s)
IX Others
(a) Has the proposal been appraised by the Administrative
Ministry/Department. If yes, name and designation of the
members of the appraisal committee may be provided. Also
attach appraisal note and minutes of the meeting
(b) Remarks/Comments
List of documents to be submitted along with Memo:

1. Project Information Memorandum

2. Feasibility Report and Financial Modeling for the project period.

3. Detailed Project Report (Details provided in PPPAC/SFC Memo should be in accordance with
the DPR)

4. RfP, Concession Agreement

5. Deviation Statement from Model RfP, MCA or draft CA on which project documents are based,
etc.
 Annexure - II

Guiding Principles & Format for Appraisal Note by NITI Aayog

1. General Analysis
a. Sectoral Analysis – Rationale/Justification for the project, review of demand-supply
gap, availability of options, etc.
b. PPP model analysis – Rationale / justification for selecting this particular model. Could
there be a better model?
c. Socio-Economic cost-benefits analysis.
2. Financial Analysis:
a. Appraisal of financial indicators (with assumptions) such as NPV, IRR, EIRR and viability
of the project.
b. Appraisal of the project costs and revenue assumptions including recovery of fixed and
variable costs
c. Appraisal of assumptions of funding specially from the point of view of possibility of
financial closure
d. Appraisal of Tariffs/ user charges mechanism including reasonability of Tariffs/ user
charges?
e. Appraisal of the grant component
f. Appraisal of bidding parameters.
g. Value for money and public sector comparator analysis
3. Risk Allocation analysis:
a. Roles and responsibilities of public and private partners.
b. Analysis of service level agreements.
4. Project Document Analysis
a. Deviations from MCA /Draft CA and Model RFP
b. Scrutiny of Project Report for any discrepancies
 Annexure – III

Timeframe for various steps under the appraisal procedure for PPP projects

(other than under IIPDF)

S. No. Action Time taken

1. Appraisal of Committee Members on the documents Three weeks

forwarded by the Administrative From the time of submission of the
Ministry/Department for Recommendation of complete set of documents of the
Committee project proposal by the
Administrative
Ministry/Department

2. Meeting to be convened for considering Five weeks

Recommendation of the project by the Committee From the time of submission of the
complete set of documents of the
project proposal by the
Administrative
Ministry/Department
 Annexure – IV

List of MCAs and DCAs

MCAs approved by the Ministries/Departments are as below:

Ministry of Road Transport and Highways

1. MCA on Hybrid Annuity Model Projects,

2. MCA on Built Operate and Transfer Projects (Annuity)
3. MCA on Built Operate and Transfer Projects (Toll)
4. MCA for PPP in Tolling, Operation, Maintenance & Transfer of National Highways

Ministry of Shipping

1. MCA for PPP Projects in Major Ports

Department of Food & Public Distribution

1. Public Private Partnership in Storage of Food grains

Ministry of Power

1. Model Bidding Document for Construction & Operations of Power stations (DBFOT)
2. Model Bidding Document for Thermal power Stations on (DBFOO)
3. Model Bidding Document for procurement of power for medium term from power generating
stations set up on (FOO)
4. Model Bidding Document for procurement of peaking power for medium term
5. Model Power Supply Agreement for Generation of Electricity (DBFOO)
6. Model Power Agreement for Procurement of Power (DBFOO basis)
7. Model Power Agreement for Procurement of Power (FOO basis)
8. Model Pilot Agreement for Procurement of Power
9. Model Pilot Power Supply Agreement

Draft Concession Agreements developed by erstwhile Planning Commission and now by NITI
Aayog are as below;

1. MCA for National Highways

2. MCA for National Highways (Six-Laning)
3. MCA for State Highway
4. MCA for Operation & Maintenance of Highway
5. MCA for State Ports
6. MCA for Ports Terminals
7. MCA for Greenfield Airports
8. MCA for Brownfield Airports
9. MCA for Airport Terminals
10. MCA Urban Rail Transit Systems
11. MCA for Annuity Projects
12. MCA for Transmission of Electricity
13. Model Power Purchase Agreement (DBFOT)
14. Model Power Supply Agreement (DBFOT)
15. Model Agreement for Procurement of Power (Medium-Term)
16. Model agreement for Supply of Power (Short- term)
17. MCA for Coal Mining
18. MCA for Exploration & Mining of Coal
19. MCA for Re-development of Railway Stations
20. MCA for Container Train Operations
21. Procurement-Cum –Maintenance Agreement for Locomotives
22. Model Agreement for EFC of Civil Works
23. Model Agreement for EPC of Railway Projects
24. MCA for Storage of Food grains
25. MCA for School Education (Central)
26. MCA for School Education (States)
27. Development and Operation of Integrated Solid Waste Management System and Reclamation of Land
through Bio-Remediation of Legacy Waste under HAM
28. Integrated Development and Operation of Sewage Treatment Plants and Faecal Sludge Management
System under HAM
29. Operation and Maintenance of Passenger Ropeways
30. Operation and Maintenance of Electric Buses in Cities (OPEX Model)
31. Establishment of a Medical College & augmentation of attached Hospital on PPP
32. Setting Up & Operating Automated Inspection & Certification Centers for Transport Vehicles
33. Development and Operation of Eco-Tourism Resort and Supporting Infrastructure
34. PPP for Non-Communicable Diseases in District Hospital
 Annexure – V

Institutional Structure

V.1. The PPP Appraisal Committee (PPPAC) shall:

• Appraise and Recommend Central Sector PPP projects in Infrastructure with project value
of more than Rs.500 Crore;
• Appraise under the Guidelines for Asset Monetization of Core Infrastructure Assets
• In case of Central Sector project proposals seeking VGF Support, Appraise the Central
Sector PPP projects in Infrastructure (irrespective of project value) and Approve (In-Principal
and Final) VGF Support
• Approve (In-Principal and Final) VGF Support for projects sponsored by State Governments
or their entities
Composition of PPPAC shall be as follows:
(a) Secretary, Department of Economic Affairs (in the Chair)
(b) CEO, NITI Aayog;
(c) Secretary, Department of Expenditure;
(d) Secretary, Department of Legal Affairs;
(e) Secretary of the Administrative Ministry/Department sponsoring a project;
(f) Joint Secretary, IPF, DEA (Member Secretary)
The PPPAC would be serviced by the PPP Cell in DEA.
V.2. Appraisal of Central Infrastructure Sector PPP projects with project value of upto Rs.500 Crore
will be done by SFC comprising the following:
(a) Secretary of the Administrative Ministry (in the Chair)
(b) Financial Adviser of the Administrative Ministry
(c) Joint Secretary of the concerned Division (Member Secretary)
(d) Representative of Department of Economic Affairs
(e) Representative of Department of Legal Affairs
(f) Representative of NITI Aayog
The SFC would be serviced by the SFC Secretariat in the respective Ministries, as may be so designated
by the concerned Ministry/Department.
V.3. SFC may give suggestions to Committee for amendments to these Guidelines, however, powers to
recommend amendments to the Guidelines rest exclusively with the PPPAC.
 Annexure – VI

APPRAISAL PROCESS FLOW CHART

SPONSORING MINISTRY/DEPARTMENT SUBMITS PROPOSAL TO THE

PPPAC/SFC SECRETARIAT FOR RECOMMENDATION IN FORMAT AS
PER ANNEXURE I

PPPAC/SFC SECRETARIAT CIRCULATES PROPOSAL TO ALL

PPPAC/SFC MEMBERS

NITI AAYOG NOTE AND OTHER PPPAC/SFC MEMBERS SUBMIT

RESPECTIVE APPRAISAL NOTES TO SPONSORING MINISTRY/
DEPARTMENT

PROPOSAL WITH RESPONSES ON APPRAISAL NOTES IS SUBMITTED

TO PPPAC/SFC FOR CONSIDERATION
PROPOSAL RESUBMISSION WITH

NO PPPAC/SFC
CHANGES

RECOMMENDS

YES

SPONSORING MINISTRY
YES UNDERTAKES MATERIAL
CHANGE IN PROJECT SCOPE
OR CONFIGURATION OF
APPROVED DOCUMENTS

NO

SPONSORING MINISTRY/DEPARTMENT SUBMITS

PROPOSAL TO COMPETENT AUTHORITY/ INVITES
FINANCIAL BIDS