The Andhra Pradesh Infrastructure Development Enabling Act, 2001.

THE ANDHRA PRADESH INFRASTRUCTURE
DEVELOPMENT ENABLING ACT, 2001
ACT No. 36 OF 2001
ARRANGEMENT OF SECTIONS
CHAPTER I
PRELIMINARY
Sections
1. Short title, extent, application and commencement
2. Definitions
CHAPTER II
ESTABLISHMENT, CONDUCT OF BUSINESS AND
EMPLOYEES OF THE INFRASTRUCTURE AUTHORITY
3. Constitution of Infrastructure Authority
4. Composition of the Authority
5. Term of office of the members
6. Terms and conditions of Service
7. Meetings of the Authority
8. Appointment of officers and staff of the Authority
9. Constitution of Committees
10. Functions of the Infrastructure Authority
11. Powers of the Infrastructure Authority
12. Report to the Government
CHAPTER III
INFRASTRUCTURE PROJECT DELIVERY PROCESS
13. Participation in infrastructure project
14. Project identification
15. Priortisation of projects
16. Recommendations by the Infrastructure Authority
17. Sanction by the Government
18. Consultant selection
19. Developer Selection process
(I) Direct Negotiations
(II) Swiss Challenge Approach
(III) Competitive Bidding
20. Approval of contract principles
21. Selection criteria
22. Treatment of Sole Bid
23. Treatment of limited response
24. Treatment of Bid submitted by a consortium
25. Speculative bids
26. No negotiation on financial or commercial proposal
27. Bid security
CHAPTER IV
GENERIC RISKS DISCLOSURE AND ALLOCATION,
SECURITISATION, RIGHT OF LENDERS AND FACILITIES TO
BE PROVIDED BY THE GOVERNMENT AGENCY OR THE LOCAL
AUTHORITY
28. Generic Risks Disclosure and its allocation and treatment
29. Facilitation of securitisation
30. Rights of lenders
31. Facilities to be provided by the Government Agency or the Local
Authority
CHAPTER V
CONCILIATION BOARD
32. Establishment of Board
33. Constitution of the Board
34. Head Quarters
35. Term of office of the members
36. Terms and conditions of appointment
37. Functions of the Board.
38. Administrative assistance
39. Powers of the Board
40. Judicial proceeding
CHAPTER VI
CONCILIATION PROCEEDINGS
41. Application and scope
42 Commencement of conciliation proceedings
43. The Board and certain Enactments
44. Co-operation of the Parties with the board
45 Suggestions by parties for settlement of dispute
46. Settlement agreement
47. Status and effect of settlement agreement
48. Termination of  conciliation proceedings
49. Resort to Arbitral or Judicial Proceedings
50. Commencement of arbitral or judicial proceedings
51. Costs
52. Nil
53. Admissibility  of evidence in other proceedings
CHAPTER VII
INFRASTRUCTURE PROJECTS FUND
54. Establishment of the fund
55. Fees and charges to be credited to the fund
56. Administration of the fund
57. Utilisation of the fund
58. Operation of the fund
59. Formulation of policy and regulations for the fund
60. Audit report of the fund
CHAPTER VIII
MISCELLANEOUS
61. Control by Government
62. Transparency
63. Abuser charges
64. Polluter charges
65. Appeal
66. Indemnity by the Developer
67. Recovery of costs, charges, dues, fees, and fines
68. Application of fines and charges
69. Penalties
70. Offences by companies
71. Power to compound offences
72. Cognizance of offences
73. Penalties and proceedings not to Prejudice other actions
74. Protection of action taken in good faith
75. Members and staff of Infrastructure Authority or Conciliation
Board to be Public Servants
76. Bar of jurisdiction
77. Power to remove difficulties
78. Power to make regulations
79. Power to make rules
80. Delegation of powers
81. Act to override other state laws
82.
84.
Repeal of Ordinance 4 of 2001.
Transitional Provision
SCHEDULE- I
(See Section 2 (h))
SCHEDULE- II
(See Section 2 (e))
CATEGORIES OF PROJECTS
SCHEDULE- III
(See Section 2 (nn))
SECTORS
SCHEDULE- IV
(See Section 2 (1))
GENERIC RISKS
SCHEDULE- V
(See Section 2 (rr))
STATE SUPPORT
THE ANDHRA PRADESH INFRASTRUCTURE
DEVELOPMENT ENABLING ACT, 2001
ACT NO. 36 OF 2001
[10thOctober, 2001]
AN ACT TO PROVIDE FOR THE RAPID DEVELOPMENT OF PHYSICAL AND
SOCIAL INFRASTRUCTURE IN THE STATE AND ATTRACT PRIVATE
SECTOR PARTICIPATION IN THE DESIGNING, FINANCING,
CONSTRUCTION, OPERATION AND MAINTENANCE OF INFRASTRUCTURE
PROJECTS IN THE STATE AND PROVIDE A COMPREHENSIVE
LEGISLATION  FOR REDUCING ADMINISTRATIVE AND PROCEDURAL
DELAYS, IDENTIFYING  GENERIC PROJECT RISKS, DETAILING VARIOUS
INCENTIVES, DETAILING  THE PROJECT DELIVERY PROCESS,
PROCEDURES FOR  RECONCILIATION OF DISPUTES AND ALSO TO
PROVIDE  FOR OTHER ANCILLARY AND INCIDENTAL MATTERS
THERETO WITH A VIEW TO PRESENTING BANKABLE PROJECTS TO THE
PRIVATE SECTOR AND IMPROVING LEVEL OF INFRASTRUCTURE IN THE
STATE OF ANDHRA PRADESH AND FOR MATTERS CONNECTED THEREIN
OR INCIDENTAL THERETO.
Be it enacted by the Legislative Assembly of the State of Andhra Pradesh
in the Fifty Second year of the Republic of India as follows:
CHAPTER - I
PRELIMINARY
1.  Short title, extent, application and commencement – (1) This Act may
be called the Andhra Pradesh Infrastructure Development Enabling Act, 2001.
(2) It extends to the whole of the State of Andhra Pradesh.
(3) It shall apply to all infrastructure Projects implemented through
Public Private Partnership in the sectors enumerated in Schedule III of the Act
and to such other sectors as may be notified by the Government under the Act
from time to time.  The Act will not apply to any infrastructure Project which is
undertaken by any joint venture between the State or Central Government
Departments or between the State or Central Government and any Statutory
Body or between any Statutory Bodies  or between the State or Central
Government or Statutory Body and any Government Company or any
infrastructure Project which may be taken over by any  private party or private
sector undertaking upon privatisation or dis-investment by the State or Central
Government  or Government Agency  or by any Statutory Corporation or any
Government Company or any Infrastructure Project which does not involve
fresh, new, additional investment being made by a private sector participant or
any Infrastructure Project which is expressly notified to be excluded from the
provisions of the Act by the Government.
(4) It shall be deemed to have come into force with effect on and from the
20th August, 2001.
2. Definitions – In this Act unless the context otherwise requires;-
(a)  “Act” means the Andhra Pradesh Infrastructure Development
Enabling Act, 2001;
(b) “Best Effort” means best efforts made in the circumstances;
(c) “Bidder” means any entity including any Bidding
Consortium, who has submitted a proposal to undertake an
infrastructure project under Public Private Partnership;
(d) “Bidding Consortium” means if the proposal for the project is
made jointly by more than one entity, then such group of entities
shall be referred to as a Bidding Consortium;
(e)  “Categories of Projects” means categories specified in
schedule –II of the Act and such other categories as may be
notified by the Government from time to time;
(f) “Charges for Abuse or Abuser Charges” means the levy of
charges by the Infrastructure Authority on any developer, if any
developer abuses any right accorded under the Concession
Agreement, in the course of development, implementation,
operation, maintenance, management and transfer of any
Infrastructure Project, to the extent as may be specified in the
Concession Agreement or such other agreement as may be
prescribed by the Government;
(g) “Company” means any entity incorporated by memorandum
of association under the Companies Act, 1956 (Central Act 1 of
1956) or incorporated under any other statute or deemed to be
incorporated under the laws of India or the laws of any other
country of the world;
(h)  “Concession Agreement” means a contract of the nature
specified in Schedule- I between the developer and the State
Government or Government Agency or the Local Authority relating
to any Infrastructure Project or such other contract as may be
prescribed from time to time by Government;
(i) “Conciliation Board” means the Conciliation Board
established under section 32 of the Act;1[Provided that unless the parties otherwise agreed the
provisions of chapters V and VI of the Act shall not apply to any of
the projects under taken as per provisions of the Act];
(j)  “Construction” means any  construction, reconstruction,
rehabilitation, improvement, expansion, addition, alteration and
related works and activities including supply of any equipment,
materials, labour and services related to  build or rehabilitate any
Infrastructure Project comprising of physical structures or systems
or commodities or for utilization of resources or provision of
services;
(k) “Developer” means any Private Sector Participant who has
entered into a contract for the Infrastructure Project with the
Government or Government Agency or Local Authority under the
Act;
(l) “Generic Risks” means circumstances that have the potential
to adversely affect the development of a project or interest of the
participants to the Project or interest of the Government or
Government Agency or Local Authority and in the nature of
construction period risk, operation period risk, market and
revenue risk, finance risk, legal risk and miscellaneous risks as
enumerated in Schedule – IV of the Act;
(m) “Government” means the State Government of Andhra
Pradesh;
1. Proviso added  by Act 3 of 2017, S.2.
(n)  “Government Agency” means any department of the
Government or any corporation or body owned or controlled by the
Government by reason of the  Government holding not less than
fifty one percent of paid-up share capital in such corporation or
body;
(o)  “Government Company” means any company in which not
less than fifty-one per cent of the paid-up share capital is held by
the Central Government, or by any State Government or
Governments, or partly by the Central Government and partly by
one or more State Governments and includes a company which is
a subsidiary of a Government company as defined;
(p)  “Fund” means the Infrastructure Projects Fund established
under section 54 of the Act;
(q)  “Infrastructure Authority” means the Authority constituted
under section 3 of the Act;
(r) “Infrastructure” means public works relating to
infrastructure for utilising the  natural  resources and providing
services by either public works of physical structure or systems for
facilities or commodities or utilisation of resources or provision of
services;
(s) “Infrastructure Project or Project” means a project in the
sectors as notified under the Act by the Government;
1[(sa)  “Implementing Agency” means any department of
Government, any Government Corporation or Public Sector
undertaking and Government Agencies etc., which shall implement
their projects independently by following the procedure i.e.,
Business Rules of their department, and other rules being followed
by respective Government Departments, Government Agencies,
Public Sector undertaking respectively. The Infrastructure
Authority may be chosen to be Implementing Agency and frame its
own procedure for such projects;]
(t)  “Investment” means preliminary and pre-operative expenses,
capital expenditure, lease on land and equipment interest during
construction, administrative expenses, all operating and
maintenance expenses including expenses incurred on recovery of
User Levies;
(u)  “Lead consortium Member”  means in case of a Bidding
Consortium, that consortium member vested with the prime
responsibility of developing a project, holding not less than 26%
equity stake in the Bidding Consortium and also holding the
highest equity stake amongst all other consortium members. In the
event of two or more consortium members holding the highest
equal stake, the Bidding Consortium shall clearly indicate in the
Bid which consortium member is to be considered the Lead
Consortium Member and the consortium member so indicated or
named shall be the Lead Consortium Member;
(v) “Lender” means a financial institution or bank or any
entity providing financial assistance with or without security or
giving any advances to any Developer for completing or
implementing any project under the Act;
1. Ins. new clause by Act 3 of 2017, S.2.
(w)  “Linkage Infrastructure Project” means from any project
under the Act any road link to the nearest State highway, national
highway or rail link or water transmission link to the nearest
practical water source including an existing pipeline or canal or
water body or sewerage link to the nearest practical sewerage
transmission line or sewerage treatment facility or such other
facility;
(x) “Mega Infrastructure Project” means any Project
implemented or undertaken through Public Private Partnership
under the Act requiring an investment may be prescribed by the
Infrastructure Authority;
(y)  “Local Authority” means any Municipal Corporation or
Municipal Council or any Panchayat or any other statutory body
formed, elected or appointed for local self- Government;
(z)  “Local Laws” means laws other than Central laws and
applicable to the State;
(aa) “Member” means a member of the Infrastructure Authority
which includes the Chairperson, the Vice- Chairperson and any
other member of the Infrastructure Authority;
(bb) “Non Profit Organisation” means any organization formed for
promoting commerce, art, science, religion, charity or any other
useful object and applies its income in promoting its objects and
prohibits the payment of any dividend to its members and does not
allow its corpus or income to be lent or advance or diverted or
utilised or exploited by its members or office bearers or any other
company in which they or any of them may be interested or
connected;
(cc) “Notification” means a notification published in the Andhra
Pradesh Gazette and the word “notified” shall be construed
accordingly;
(dd) “Person” shall include any company or association or body of
individuals whether incorporated or not;
(ee) “Polluter Charges” means levy of prescribed charges by the
Infrastructure Authority on any Developer, if any Developer
polluters the environment or does not adhere to the specifications
and measures for environment preservation and conservation
agreed under the contract with the Government or the Government
Agency or the Local Authority or fails to stop polluting the
environment with in thirty days of receipt of  notice in writing from
the Infrastructure Authority or the Government Agency or the
Local Authority;
(ff)1[* * * * * *]
(gg) “Private Sector Participant” means any person other than
Central Government or State Government or  Government Agency
or any joint venture between Central Government or State
Government department or any Statutory Body or Authority or
Local Authority or any Corporation or Company in which Central
Government or State Government or Government Agency,
1. The clause (ff) omitted by Act 3 of 2017, S.2.
Statutory Body or Authority or Local Body is holding not less than
fifty one percent paid-up share capital;
(hh) “Prescribed” means prescribed by rules or regulations made
under this Act;
1[(hhh) ‘Project’ means a project deemed to have been initiated by the
Government or the Government agency or the Local Authority, if
( a ) t o t a l b u d g e t a r y a l l o c a t i o n f o r d e v e l o p m e n t o f s u c h p r o j e c t h a s
been made by the Government or the Government Agency or the
Local Authority and
(b) public announcements calling for bids for development of the
project have been issued by the Government or Government Agency
or the Local Authority;]
(ii) “Prospective Lenders” means financial institutions, banks or
any other entities of such project financing track record as may be
prescribed, who in principle or agreeable to provide guarantees or
finance to the Bidder under any of the financing documents;
(jj) “Public Private Partnership” means investment by the Private
Sector Participant in an Infrastructure Project of the Government
Agency or the Local Authority in the State;
(kk) “Regulations” means regulations made under section 78 of
the Act;
(ll) “Responsive Bid”  means a bid from an eligible Bidder which
complies with all the requirements prescribed by the tender
documents or other documents as the case may be;
(mm)  “Rules” means rules made under section 79 of Act;
(nn)    “Sectors” means sectors as notified under Schedule- III of
the Act and as may be notified from time to time by the
Government.
(oo)  “Sector Regulator” means the regulatory authority for  a
Sector or Sectors as may be notified by the Government from time
to time;
(pp) “Sole Bid” means when in competitive bidding process there
is only one Responsive Bid received by the Government Agency or
the Local Authority;
(qq)  “State” means the State Government of Andhra Pradesh;
(rr) “State Support” means a grant by the state of any
administrative support, asset-based support, foregoing revenue
benefits support, undertaking contingent liabilities by providing
guarantees or financial support to the Developer as enumerated in
Schedule V of the Act;
(ss) “Swiss Challenge Approach” means when a Private Sector
Participant (Original Project Proponent) submits an unsolicited or
suo-mottu proposals and draft contract principles for undertaking
a category II Project, not already initiated by the Government
1. The clause (hhh) inserted by Act 1 of 2016,  S.2.
Agency or the Local Authority and the Government Agency or the
Local Authority then invites competitive counter proposals in such
manner as may be prescribed by the Government. The proposal
and contract principles of the Original Project Proponent would be
made available to any interested applicants, however, proprietary
information contained in the original proposal shall remain
confidential and will not be disclosed. The applicants then will
have an opportunity to better the Original Project Proponent’s
proposal. If the Government finds one of the competing counter
proposals more attractive, then the Original Project Proponent will
be given the opportunity to match the competing counter proposal
and win the Project. In case the Original Project Proponent is not
able to match the more attractive and competing counter
proposals, the project is awarded to the Private Sector Participant,
submitting the more attractive competing counter proposal;1[Provided that the interested applicants shall mean only qualified
bidders.
Provided further that the proprietary information means and
includes the business plan of the proponent viz., Technical data, the
commercial information and plans or design etc., prepared by proponent
but not the revenue share offered by proponent.]
(tt)  “Unsolicited or suo-mottu Proposal” means a proposal in
respect of a Project not already initiated by the Government Agency
or Local Authority and which proposal is submitted by any Private
Sector Participant to the Government Agency or Local Authority in
respect of any Infrastructure in the State supported by Project
specifications, technical, commercial and financial viability and
prima facie evidence of the financial and technical ability of such
Private Sector Participant to undertake such Project with full
details of composition of the Private Sector Participant and his
financial and business background; and
(uu) “User levis” means the right or authority granted to the
developer by the Government Agency or the Local Authority to
recover investment and fair return on investment and includes toll,
fee, charge or benefit by any name;
CHAPTER - II
ESTABLISHMENT, CONDUCT OF BUSINESS AND
EMPLOYEES OF THE INFRASTRUCTURE AUTHORITY
3. Constitution of Infrastructure Authority -(1) The Government may, by
notification and with effect on and from such date as may be specified therein
constitute an authority to be called, “the Infrastructure Authority”.
(2) The Authority constituted under sub-section(1) shall be a body
corporate having perpetual succession and a common seal, with power to
acquire, hold and dispose of property both movable and immovable to do all
things incidental to and necessary for the purposes of this Act and to contract
and may by the said name sue and be sued.
(3) The headquarters of the authority shall be at Hyderabad or at such
other place as may be notified.
1.The provisos added by Act 3 of 2017, Sec.2.
4. Composition of the Authority -(1) The Authority shall consist of a
Chairperson,1[Vice Chairperson] and such other members not exceeding
fifteen in the aggregate including Ex-officio members.2“(2) [The Chief Secretary to the Government or any other person with
equivalent experience shall be the Chairperson of the authority”].
3[“(2A) The Principal Secretary to Government, Infrastructure and
Investment Department shall be the Vice Chairperson of the Authority”]
(3) The Ex-officio members of the Authority shall be the following:-
(i) Secretary to the Government, Finance and Planning (Finance
Wing) Department;
(ii) Secretary to the Government, Transport, Roads and Buildings
Department;
(iii) Secretary to the Government, Municipal Administration and
Urban Development Department;
(iv) Secretary to the Government, Information Technology
Department;
(v) 4[Managing Director, Infrastructure Corporation of Andhra
Pradesh];
(vi)5[XXXX]
(4) The Members other than those specified in sub-section (3) shall be
appointed by the Government in the manner prescribed.
5. Term of Office of the Members - Every member other than the Ex-officio
member shall hold office during the pleasure of the Government,
6. Terms and conditions of service -The terms and conditions of service of
the members of the Authority including the honororia and the allowances to be
paid to them shall be such as may be prescribed.
7.6[* * * * *]
8. Appointment of officers and staff of the Authority - The Authority may
appoint such officers and members of staff  as it may require in carrying  out
its functions and discharging its duties under this Act in such manner as may
be prescribed.
9. Constitution of Committees –
(1)7[* * * * *]
(2) The Authority shall invite such persons from the fields  of  banking,
commerce, industry, environment, law, technology and the like as may be
nominated by the Government from time to time to assist the Authority in
carrying out its functions under this Act on such terms and conditions as may
be prescribed.
1 . The words ‘Vice Chairperson’ inserted by Act 9 of 2006, Sec.2.2 . The sub-section (2) Subs. by Act 18 of 2002, Sec.2.3 . The sub-section (2A) inserted by Act  9 of 2006, Sec.2.4 . The proviso (V) Subs. by Act 9 of 2006, Sec.2.5 . The clause(Vi) omitted by Act 9 of 2006, Sec.2.6 . The Sec.7 omitted by Act 3 of 2017, Sec.3.7 . In Sec.9 sub-section (1) omitted by  Act 3 of 2017, Sec.4.
10. Functions of the Infrastructure Authority -The functions of the
Infrastructure Authority shall be as follows:-
(a) to conceptualise and  identify  projects and ensure their
conformance to the objectives of the State 1[for such
conceptualized projects];
(b)2[*         *          * * *]
(c) 2[* * * * *]
(d) 2[*          * * * *]
(e) 2 [*          * * * *]
 (f) 2 [*          * * * *]
(g) 2 [*          * * * *]
(h) 2 [*          * * * *]
(i) 2 [*          * * * *]
(j) 3 [* * * *]
(k) 2 [*          * * * *]
(l) 2 [*          * * * *]
(m) 2 [*          * * * *]
(n) 2 [*          * * * *]
(o) 2 [*          * * * *]
(p) 2 [*          * * * *]
(q)  to decide issues pertaining to user levies including but not
limiting to prescribing mechanism and procedure for setting,
revising, collecting and / or regulating user levies and to decide
and settle disputes relating to user levies;
(r)    to approve sectoral policies and model contract principles;
(s) 4[*          * * * *]
(t)4[*          * * * *]
(u) to administer  and manage the Fund and its assets;
(v)4[*          * * * *]
1. The words ‘for such conceptualized projects’ added by Act 3 of 2017, Sec.5.
2 .Clauses (b) to (p) omitted by Act 3 of 2017, Sec.5.
3. Clause (j) omitted by Act No. 1 of 2016, S.3.4. Clauses (s), (t) and (v) omitted by Act 3 of 2017, Sec.5.
(w)1[*          * * * *]
(x)1[*          * * * *]
(y) to fix and provide for recovery of fees, levies, tolls and charges
as may be specified from time to time;
(z)  to levy and recover charges for abuse and polluter charges from
the developer;
(aa)1[*          * * * *]
(bb)1[*          * * * *]
11.2[*          * * * *]
12.2[*         *          *          *           *]
CHAPTER – III
INFRASTRUCTURE PROJECT DELIVERY PROCESS
13. Participation in Infrastructure Project –Any Private sector participant
may participate in financing, construction, maintenance, operation and
management of Infrastructure Projects covered under the Act.
14.3[ Project Identification – Government or any Government Departments
or Infrastructure Authority or any Government Public Sector undertaking or
any Government Agency or local body may conceptualize develop and
implement any infrastructure project by following the procedure prescribed by
respective departments or such agencies referred above].
15. 4[*          * * * *]
16. 4[*          * * * *]
17. Sanction by the Government –The Government shall consider the
proposal submitted by the Government Agency or Local Authority and the
proposed Concession Agreement and either accept the proposal and
Concession Agreement with or without modification or return the proposal and
Concession Agreement to the Government Agency or the Local Authority for
reconsideration or reject the proposal within such time as may be prescribed.
The Government Agency or the Local Authority will take suitable action on the
decision  taken by the Government on the proposal and the Concession
Agreement including revising and resubmitting  the proposal and the
Concession  Agreement if returned by the Government for reconsideration by
the Government Agency or the Local Authority.
Provided that if the Bidder whose proposal submitted for sanction is not
in a position to implement  the project, the Government may at the request  of
the Government Agency or the Local Authority5[*     *   *    *] consider
the proposal of the Bidder offering the second most competitive bid for
sanction.
1. Clauses (w), (x), (aa) and (bb) omitted by Act 3 of 2017, Sec.5.2. Sec.11 and Sec.12 omitted by Act 3 of 2017, Sec.6.3. Sec.14 substituted by Act 3 of 2017, Sec.7.4 Sec.15 and Sec.16 omitted by Act 3 of 2017, Sec.8.5. The words ‘with the approval of the Infrastructure Authority’ omitted by Act 3 of 2017, Sec.9.
18. 1[ Consultant Selection –The Government Agency or Local Authority or
public sector undertaking or Infrastructure Authority may select appropriate
consultants as may be required to conceptualize, development or implement
any infrastructure project by following transparent procedure].
19. Developer Selection Processes - The Government Agency or the  Local
Authority may adopt appropriate Developer Selection process including any of
the  following processes, namely:-
(1) DIRECT NEGOTIATIONS
(1)  The Government Agency or the Local Authority may directly negotiate
with a Bidder for implementing;
(a)  Category- I projects initiated by a Bidder, or
(b)  the projects which involve proprietory  technology, or franchise which
is exclusively  available with the Bidder globally; or
(c)  the projects where competitive bid process has earlier failed to
identify a suitable developer; or
(d)    the projects in prescribed social infrastructure sectors where a non-
profit organisation seeks to develop a project ; or
(e) a linkage  Infrastructure Project with the concerned Developer of
Mega Infrastructure Project.
(ii) In case a developer is selected through direct negotiations, the
Government Agency or the Local Authority may renegotiate the financial offer
or recommend that all subsequent procurement for the project is made through
the competitive bidding procurement process, the cost of the project be
determined after such competitive bidding procurement process and
renegotiate the financial offer based on the revised cost of the project.
(II) SWISS CHALLENGE APPROACH
(i) The Swiss Challenge Approach will be followed in any projects
belonging to Category-II initiated by a private sector participant who is
hereinafter  referred to as ‘Original  Project Proponent’, by a suo-motu
proposal.
(ii) The Original Project Proponent must submit to the Government
Agency or Local Authority:-
(a) details of his technical, commercial, managerial and financial
capability;
(b) technical, financial and commercial details of the proposal;
(c) principles of the concession agreement.
(iii)  The Government Agency or the Local Authority would first evaluate
the Original Project Proponent’s technical, commercial,  managerial and
financial  capability as may be prescribed and determine whether the Original
Project Proponents capabilities are adequate for undertaking the project.
1. Sec.18 substituted by Act 3 of 2017, Sec.10.
(iv)1[*          * * * *]
(v)1[*          * * * *]
(vi)1[*          * * * *]
(vii)1[* * *          * *]
(viii) In the event of the Project not being awarded to the Original Project
Proponent and being awarded to any other Bidder, the Government Agency or
the Local Authority will reimburse to the original Project Proponent reasonable
costs incurred for preparation of the suo-motu proposal and the Concession
Agreement.  The suo-motu proposal and the Concession Agreement prepared
by the Original Project Proponent shall be the property of the Government
Agency or the Local Authority as the case may be.
(ix) The reasonable costs of preparation of the suo-motu proposal and the
Concession Agreement shall be determined as per the norms prescribed by the
Government and shall be binding upon the Original Project Proponent.
2[(x) the above Swiss Challenge approach shall however be followed in
respect of a Project Subject to the approval of Competent Authority.]
(III) COMPETITIVE BIDDING
(i) Competitive Bidding will be adopted in all Projects initiated by the
Government Agency or the Local Authority.  The notice inviting participation
will be adequately publicised by the Government Agency or the Local Authority
as may be prescribed.
(ii) The bid process will be designed to assist and ascertain, technical,
financial, managerial and commercial capabilities of the Developer.
(iii) In case of a two stage process being adopted for a Mega
Infrastructure Project, the Government Agency or the Local Authority may
require all Bidders to obtain from their Prospective  Lenders, financial terms,
expectations regarding State Support, comments on the Concession Agreement
and other project documents (hereinafter called “Deviations”).
(iv) Any Deviations proposed shall be enclosed in a separate envelope and
shall not be part of the envelope containing the financial or the commercial
offer with regard to a project.  The procedure for determining the common set
of Deviations and the effect to be given to such common set of Deviations shall
be as may be prescribed.
(v) All proposals shall be opened and evaluated at a common platform in
a free and fair manner.
(vi) It will be open for the Government Agency or the Local Authority to
adopt one or two stage process depending upon the complexity of the project.
(vii)3[*          * * * *]
20. Approval of contract principles - In case a model contract for a Sector
has not been adopted or in case there are Deviations proposed vis-à-vis the
1. In Sec.19 in clause II under the heading “Swiss challenge Approach” Sub clauses (iv), (v), (vi) and (vii) omitted
by Act 3 of 2017, Sec.11.2 Sub clause (x) added after Sub clauses (ix) in clause II under the heading “Swiss challenge Approach” in Sec.19.3. Sub clause (vii) in clause III under the heading “Competitive Bidding” in Sec.19 omitted by Act 3 of 2017,
Sec.11.
approved model contract for a Sector, then, the1[Government] will formulate or
approve the contract principles as the case may be.
21. Selection criteria –The Government Agency or the Local Authority with
first satisfy itself about the technical ability of the Developer to undertake and
execute the Project and will follow,--
(a) One or combination of one or more of the following criteria for
Developer  selection through competitive bidding in Build Own Operate and
Transfer, Build Operate and Transfer and Build Own and Operate Projects:-
i) Lowest bid in terms of the present value of user fees;
ii) Highest revenue share to the Government;
iii) Highest up front fee;
iv) Shortest concession period;
v) Lowest present value of the subsidy;
vi) Lowest capital cost and Operation and Management cost for
Projects having a definite scope;
vii) Highest equity premium and
viii) Quantum of State Support solicited in present value.
(b) For Build Transfer, Build Lease and Build Transfer and Lease Projects
Selection criteria used will be the lowest net present value of payments from
the Government.
(c) Such other suitable selection criteria the Infrastructure Authority may
allow or determine.
22. Treatment of Sole Bid –In case of the competitive bidding  process
resulting into a Sole Bid, the  Government Agency or the Local Authority shall
in consultation with the1[Government], either,-
(i) accept the Sole Bid, or
(ii) re-negotiate the financial offer, or
(iii) reject the Sole Bid.
23. Treatment of limited response – In case the competitive bidding process
does not  generate sufficient response and if even a Sole Bid is not  received,
then the Government Agency  of the Local Authority  shall in consultation  with
the1[Government] either,-
(i) modify either the pre-qualification criteria  and /or  the risk
sharing  provisions and restart the bid process; or
(ii) may cancel  the competitive bid process; or
(iii)   in case of  (ii) above, may have direct negotiation with any
Private Sector Participant.
1. For the words ‘Infrastructure Authority’ the word ‘Government’ shall be substituted in Sec.20, Sec.22, and Sec.23
by Act 3 of 2017, Sec.12.
24. Treatment of Bid submitted by a consortium -(a) All proposals
submitted by a Bidding Consortium shall enclose a memorandum of
undertaking,  executed by all consortium  members  setting out the role of each
of the consortium  members and the proposed equity  stake  of each of the
consortium members with regard to a Project.
(b)  The Lead Consortium Member of a pre-qualified Consortium
cannot be replaced except with the prior permission of the1[Government] and
which permission will be considered only in case of acquisition or merger of the
Lead Consortium Member Company. Further, after a Bidding Consortium is
selected to implement any Project, the Lead Consortium Member shall
maintain a minimum equity stake of 26% for a period of time, as specified in
the Sector Policy or the Concession Agreement.
(c) Replacement of other Consortium Members may be permitted,
provided the same is not prejudicial to the original strength of Consortium as
determined in course of the evaluation of original bid or proposal.
(d)     Any change in the shareholding or composition of a Consortium
shall be with the approval of the1[Government].
25. Speculative bids  - The Government Agency or the Local Authority with
the approval of the1[Government] will be entitled to treat the speculative or
unrealistic bids as non-responsive and reject the same. By reason of any
speculation or unrealistic bid or rejection of such bid, shall not necessarily lead
to termination of the bid process. The1[Government] will prescribe the norms
for determining the speculative or unrealistic Bids.
26. No negotiation on financial or commercial proposal -Save as
otherwise provided in the Act the Government, or the Government Agency or
Local Authority will not negotiate with the Bidder on the financial or
commercial aspect of the proposal submitted by the Bidder.
27. Bid Security -(1) The Bidder will be required to submit a bid security
along with the proposal for  undertaking the Infrastructure Project, the bid
security amount will be determined based on the Project cost by the
Government Agency or the Local Authority.
(2) The procedure for refund of bid security will be specified in the
request for proposal. In any event, the bid security of unsuccessful Bidder
would be returned within 30 calendar days from the date of selection of the
Developer.
CHAPTER - IV
GENERIC RISKS DISCLOSURE AND ALLOCATION, SECURITISATION,
RIGHT OF LENDERS AND FACILITIES TO BE PROVIDED BY THE
GOVERNMENT AGENCY OR THE LOCAL AUTHORITY.
28. Generic Risks disclosure and its allocation and treatment -The
Government Agency or the Local Authority will as far as possible disclose
Generic Risks involved in a Project and a list of such Generic Risks along with
allocation and treatment of such Generic Risks may be provided in the
Concession Agreement or other contract to be entered into between the
Government Agency or the Local Authority and the Developer. The Government
Agency or the Local Authority will make optimum disclosure of the Generic
1. For the words ‘Infrastructure Authority’ the word ‘Government’ shall be substituted in Sec.24, and Sec.25 by Act
3 of 2017, Sec.12.
Risks, however if any risk is not disclosed due to inadvertence or due to
circumstances beyond the control of the Government Agency or the Local
Authority, then the same shall not be a ground for any claim, demand or
dispute by the Developer.
29.    Facilitation of the securitisation -The Government Agency or the
Local Authority  may facilitate  a Developer to securitise Project receivables and
project assets in favour of Lenders subject to such terms as may be fixed by the
Government or by the Infrastructure Authority to safeguard the successful
implementation, competition working, management and control of the project.
30.    Rights of Lenders –The Lenders will be entitled to recover their dues
from the Developer and Project receivables in the form of User Levies and in the
event of default by the Developer in completing or implementing a Project, the
Lenders will have the right to substitute the Developer with the consent of the
Government and subject to the approval of such substituted  Developer by the
Government Agency or the Local Authority and by the1[Government], on the
same terms and conditions as applicable to the previous Developer or with
such modifications as may be specifically  approved by the1[Government].
31. Facilities to be provided by the Government Agency or the Local
Authority –The Government Agency or the Local Authority will provide  all
facilities  to the Developer for obtaining statutory clearances at State Level, for
providing power and water at Project Siteduring construction on such terms
as may be prescribed and provide best effort support for obtaining Central
Government clearances and assistance in rehabilitation and resettlement
activities if any incidental to the Project on such terms  as may be prescribed.
 CHAPTER-V
CONCILIATION BOARD
32. Establishment of Board - The State Government  may by notification,
establish a Board to be called the “Conciliation Board” with effect from such
date as may be specified.
33. Constitution of the Board -The board will comprise of 3 members and
will have a retired High Court Judge acting as its Chairperson and two other
members who shall be experts in the field of either infrastructure of finance or
banking or law.
34. Head Quarters -The Board will have its permanent Head Quarters at
Hyderabad and the Board shall meet under the Chairpersonship of the
Chairperson.
35. Term of Office of the members -Every member of the Board shall hold
office for the term of 3 years from the date of appointment. The State
Government shall be entitled to reappoint any member or members for one
more term of 3 years.
36. Terms and conditions of appointment -The Terms and conditions of
appointment, remuneration and perquisites of the members shall be such as
may be prescribed by the Government.
37. Functions of the Board -The Functions of the Board shall be as
follows,-
(a) To assist the Government Agency, or Local Authority and any
Developer in an independent and impartial manner to reach an amicable
settlement of their disputes arising under the Act or the Concession
Agreement;
1. For the words ‘Infrastructure Authority’ the word ‘Government’ shall be substituted in Sec.30, by Act 3 of 2017,
Sec.12.
(b) The Board shall be guided by principles of objectivity, fairness,
obligations of the parties, the usages of the trade and the circumstances
governing the disputes including the good business practice prevalent in the
national and internation field covered by the dispute between the parties;
(c) The Board may conduct the conciliation proceedings in such a
manner as it may consider appropriate, taking into account the circumstances
of the case the wishes of the parties that may be expressed and for reaching a
speedy settlement of the dispute;
(d)   The Board may, at any stage of the conciliation proceedings, make
proposals for settlement of dispute. Such proposal need not be in writing and
need not be accompanied by any statement of reasons therefor.
38. Administrative assistance -In order to facilitate the conduct of the
conciliation proceedings, the Board with the consent of the parties, may
arrange for administrative assistance by suitable institution or person.
39. Powers of the Board –The board shall have the same powers as are
vested in a Civil Court under the Code of Civil Procedure, 1908 (Central Act 5
of 1908) while dealing with the conciliation proceedings in respect of the
following matters,  namely:-
(i)  The summoning and enforcing the attendance of any party or witness
and examining the witness on oath;
(ii)  The discovery and production of any document or other material as
evidence;
(iii)   The reception of evidence on oath;
(iv)   the requisitioning of the report of any body or any analysis or
decision from the appropriate forum or laboratory or other relevant
sources;
(v) The issuing of any commission for examining any witness;
(vi) The power to regulate its own procedure and prescribe rules; and
(vii) any other matter, which may be prescribed.
40. Judicial Proceeding -Every proceeding before the Board shall be
deemed to be a judicial proceeding within the meaning of section 193 and
section 228 of the Indian Penal Code, 1860 (Central Act 45 of 1860) and the
Board shall be deemed to be a Civil Court for the purpose of section 195 and
Chapter XIV of the Code of Criminal Procedure, 1973 (Central Act 2 of 1974).
CHAPTER - VI
CONCILIATION PROCEEDINGS
41.Application and Scope -Any dispute, claim, or difference arising out of or
in connection with or in relation to any Concession Agreement or contract
between the Government Agency or Local Authority on the one hand and the
Developer on the other hand, shall as far as possible, be amicably settled
between the parties.  In the event of any dispute, claim or difference not being
amicably resolved, such dispute, claim or difference shall be referred to the
Conciliation board.
42. Commencement of conciliation proceedings - (1) The party initiating
conciliation shall send to the other party a written invitation to conciliate under
this part, briefly indentifying the subject matter of the dispute, claim and/or
difference.  The party initiating conciliation shall file the invitation with the
Board in such Form as may be prescribed.
(2) The conciliation proceedings shall commence when the other party
receives the written invitation from the party initiating conciliation.
(3) If the other party does not reply or does not participate in the
conciliation proceedings, then the Board shall have power to call upon the
other party to file its reply or give notice to the other party and proceed further
without reply.
(4) The Board may request each party to submit to it further written
statement of their position and the facts and grounds in support thereof,
supplemented by any document and other evidence as such party deems
appropriate.  The parties shall send a copy of such statement, documents and
other evidence to the other party.
43. The Board and certain Enactments -The provisions of section 66 of the
Arbitration and Conciliation Act, 1996 (Central Act 26 of 1996) shall apply to
the Board as regards the Code of Civil Procedure, 1908 (Central Act 5 of 1908)
and the Indian Evidence Act, 1872 (Central Act 1 of 1872).
44. Co-operation of the parties with the Board -The parties shall Co-operate
with the Board and in particular, shall comply with requests by the Board to
submit written materials, give evidence and attend meetings.
45. Suggestions by parties for settlement of dispute -Each party may on
his own initiative or at the invitation of the Board, submit to the Board
suggestions for the settlement of the dispute.
46. Settlement agreement -(1) When it appears to the Board that there exists
a possibility of a settlement, the terms and conditions of which may be
acceptable to the parties, the Board shall formulate the terms and conditions of
the possible settlement and submit the same to the parties for their
observations.  After receiving the observations of the parties, if any, the Bo

Excerpt shown. Open the full act in Lexace.

‹ Prev All Andhra Pradesh acts Next ›