LexThe Telangana Infrastructure Development Enabling Act, 2001.
Telangana · state statute
Open in Lexace · Ask the AI about this actTHE TELANGANA INFRASTRUCTURE DEVELOPMENT ENABLING
ACT, 2001.
(ACT NO. 36 OF 2001)
ARRANGEMENT OF SECTIONS
Sections
CHAPTER - I
PRELIMINARY
1. Short title, extent, application and commencement.
2. Definitions.
CHAPTER - II
ESTABLISHMENT, CONDUCT OF BUSINESS AND
EMPLOYESS 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. Prioritisation of Projects.
2 [Act No. 36 of 2001]
16. Recommendations by the Infrastructure Authority.
17. Sanction by the Government.
18. Consultant selection.
19. Developer selection processes.
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 the Board.
33. Constitution of the Board.
34. Head Quarters.
[Act No. 36 of 2001] 3
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. Deposits.
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.
4 [Act No. 36 of 2001]
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 the 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.
[Act No. 36 of 2001] 5
81. Act to override other State Laws.
82. Repeal of Ordinance.
Schedule - I.
Schedule - II.
Schedule - III.
Schedule - IV.
Schedule - V.
THE TELANGANA INFRASTRUCTURE DEVELOPMENT
ENABLING ACT, 2001.1
ACT No.36 OF 2001.
CHAPTER - I
PRELIMINARY
1. (1) This Act may be called the 2Telangana Infrastructure
Development Enabling Act, 2001.
(2) It extends to the whole of the State of 2Telangana.
(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 undertake n by any joint
venture between the State or Central Government
Departments or betw een the State or Central Govern ment
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,
1. The Andhra Pradesh Infrastructure Development Enabling Act, 2001
received the assent of the Governor on the 9 th October, 2001. The said
Act in force in the combined State, as on 02.06.2014, has been adapted
to the State of Telangana, under section 101 of the Andhra P radesh
Reorganisation Act, 2014 (Central Act 6 of 2014) vide. the Telangana
Adaptation of Laws Order, 2016, issued in G.O.Ms.No.45, Law (F)
Department, dated 01.06.2016.
2. Substituted by G.O.Ms.No.45, Law (F) Department, dated 01.06.2016.
Short title, extent,
application and
commencement.
2 [Act No.36 of 2001]
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. In this Act unless the context otherwise requires,-
(a) “Act” means the 3Telangana 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 cat egories 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 Infr astructure Project, to
3. Substituted by G.O.Ms.No.45, Law (F) Department, dated 01.06.2016.
Definitions.
[Act No.36 of 2001] 3
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 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 the
Government;
(i) “Conciliation Board ” means the Conciliation Board
established under section 32 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 physic al 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;
* See the Companies Act, 2013 (Act No.18 of 2013).
Central Act 1 of 1956.
4 [Act No.36 of 2001]
(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 ris k, finance risk, legal risk and
miscellaneous risks as enumerated in Schedule IV of the
Act;
(m) “Government” means the State Government of
4Telangana;
(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 mo re State Governments
and include s 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 woks relating to
infrastructure for utilising the natural resources and
providing services by either public works of phys ical
4. Substituted by G.O.Ms.No.45, Law (F) Department, dated 01.06.2016.
[Act No.36 of 2001] 5
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;
(t) “Investment” means preliminary and pre -operative
expenses, capital expenditure, lease on lan d 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 mem ber 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 member s holding the highest equal equity
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 any financial institution or bank or
any entity providing financial as sistance with or without
security or giving any advances to any Developer for
completing or implementing any Project under the Act;
(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;
6 [Act No.36 of 2001]
(x) “Mega Infrastructure Project” means any Project
implemented or undertaken through Public Private
Partnership under the Act requiring an investm ent as 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 Infras tructure
Authority which include s the Chairperson, the Vice
Chairperson and any other member of the Infrastructure
Authority;
(bb) “Non Profi t Organisation” means any
organisation 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 5Telangana 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;
5. Substituted by G.O.Ms.No.45, Law (F) Department, dated 01.06.2016.
[Act No.36 of 2001] 7
(ee) “Polluter Charges ” means levy of prescribed
charges by the Infrastructure Authority on any Developer, if
any Developer pollutes the environment or does not adhere
to the speci fications and measures for envi ronment
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
within 30 days of receipt of notice in writing from the
Infrastructure Authority or the Government Agency or the
Local Authority;
(ff) “Prioritised Project ” means any Proje ct, which is
notified by the Infrastructure Authority as a prioritised project
under the Act;
(gg) “Private Sector Participant ” means any person
other than Central Government or State Government or
Government Agency o r any joint venture between Central
Government or State Government Departments or any,
Statutory Body or Authority or Local Authority or any
Corporation or Company in which Central Government or
State Government or Government Agency, 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;
(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
Private Sector Partici pant in an Infrastructure Project of the
Government Agency or the Local Authority in the State;
8 [Act No.36 of 2001]
(kk) “Regulation” means regulations made under
section 78 of the Act;
(ll) “Responsive Bid ” means a bid from an eligible
Bidder which complies with all the requiremen ts prescribed
by the tender docu ments or other documents as the case
may be;
(mm) “Rules” means rules made under section 79 of
the Act;
(nn) “Sectors” means sector s as notifie d 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
6Telangana;
(rr) “State Support” means grant by the State of any
administrative support, asset -based suppor t, 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 Proponen t)
submits an Unsolicited or suo -motu proposal and draft
6. Substituted by G.O.Ms.No.45, Law (F) Department, dated 01.06.2016.
[Act No.36 of 2001] 9
contract principles for undertaking a category II Project, not
already initiated by the Government 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 attr active and competing
counter proposal, the Project is awarded to the Private
Sector Participant, submitting the more attractive competing
counter proposal;
(tt) “Unsolicited or suo -motu Proposal ” means a
proposal in respect of a Project not already initiated by the
Government or 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 Infras tructure 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 a nd his financial and busine ss
background; and
(uu) “User Levies ” means the right or authority
granted to the Developer by the Government Agency or the
Local Authority to recover investment and fair return on
10 [Act No.36 of 2001]
investment and includes toll, fee, charge or benefit by any
name.
CHAPTER - II
ESTABLISHMENT, CONDUCT OF BUSINESS AND
EMPLOYESS OF THE INFRASTRUCTURE AUTHORITY.
3. (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.
4. (1) The Authority shall consist of a Chairperson, 7[Vice
Chairperson] and such other members not exceeding fifteen
in the aggregate including Ex-officio members.
8[(2) The Chief Secretary to the Government or any
other person with equivalent experience shall b e the
Chairperson of the authority.]
7[(2A) The Principal Secretary to Government,
Infrastructure and Investment Department shall be the Vice
Chairperson of the Authority.]
7. Inserted by Act No.9 of 2006.
8. Substituted by Act No.18 of 2002.
Composition of
the Authority.
Constitution of
Infrastructure
Authority.
[Act No.36 of 2001] 11
(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 G overnment, Transport, Roads
and Buildings Department;
(iii) Secretary to the Gov ernment, Municipal
Administration and Urban Development Department;
(iv) Secretary to the Government, Information
Technology Department;
9[(v) Managing Director, Infra structure Corporation of
10Telangana];
11[(vi) [XXX]]
(4) The Members other than those specified in sub -
section (3) shall be appointed by the Government in the
manner prescribed.
5. Every member other than the Ex -officio member shall
hold office during the pleasure of the Government.
6. The terms and conditions of service of the members of
the Authority including the honora ria and the allowances to
be paid to them shall be such as may be prescribed.
9. Substituted by Act No.9 of 2006.
10. Substituted by G.O.Ms.No.45, Law (F) Department, dated
01.06.2016.
11. Omitted by Act No.9 of 2006.
Term of Office of
the Members.
Terms and
conditions of
service.
12 [Act No.36 of 2001]
7. The Authority shall meet at such times and places and
observe such procedure in regard to transaction of business
at the meetings including the quorum as may be provided
by the regulations.
8. 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. (1) The Authority may, from time to time constitute
such committee or committees consisting of such members
for performing such of its functions as may be provided by
the regulations.
(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 su ch terms and
conditions as may be prescribed.
10. 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;
(b) to receive and consider projects under the Act from
the Government or Government Agency or Local Authority
and process the same;
(c) to advise the Government or Government Agency
or Local Authority, as the case may be, on the project and
give recommendations or suggestions in that behalf;
Meetings of the
Authority.
Appointment of
officers and staff
of the Authority.
Constitution of
Committees.
Functions of the
Infrastructure
Authority.
[Act No.36 of 2001] 13
(d) to co -ordinate between concerned department of
the Government and Government Agency for a project;
(e) to monitor the competitive bidding process for
Category II Projects and provide for cour se correction, if
required;
(f) to provide enablers for projects;
(g) to prioritise and categorise projects and to prepare
a project shelf;
(h) to prepare road map for project development;
(i) to identify inter-sectoral linkages;
(j) to approve the terms of reference for consultancy
assignments in Category II projects and the consultant
selection process thereof;
(k) to decide financial support and approve allocation
of contingent liabilities for projects;
(l) to recommend and approv e bid documents, risk
sharing principles and bid processes for Category II
projects;
(m) to approve the scale and scope of a suo -motu
proposal or project undertaken through Swiss -Challenge
Approach and to recommend modifications of a non
financial nature if required;
(n) to resolve issues relating to project ap proval
process;
(o) to prescribe time limits for clearances necessary for
any project;
14 [Act No.36 of 2001]
(p) to review periodically the status of clearances and
ensure that clearances are accorded within specified time
frames and grant clearances if not granted within time
frames or if denied, as may be specified;
(q) to decide issues pertaining to user levies in cluding
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) to issue and/or amend guidelines needed to
effectively implement the Act;
(t) to coordinate with sector regulator/s;
(u) to administer and manage the Fund and its assets;
(v) to coordinate execution of the projects with
Government, Government Agency and Local Authority;
(w) to supervis e or otherw ise ensure adequate
supervision over the execution, management and operation
of project;
(x) to build public opinion;
(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) to prescribe regulations to regulate its own
procedures;
[Act No.36 of 2001] 15
(bb) to take all steps necessary for enforcing the
provisions of the Act and realising the objectives of the Act.
11. (1) Notwithstanding anything contrary in any other laws
for the time being in force, the Infrastructure Authority shall
have the power to grant any clearance or permission
required for any project save and except sanction to the
project by the Government as provided under this Act and
such clearance or permission when granted shall be final,
binding and conclusive on the concerned state level
statutory bodies or administrative bodies or authorities, as
the case may be.
(2) Notwithstanding anything contrary in any law for the
time being in force, the Infrastructure Authority may give
directions to any Government Agency or Local Authority or
other Authority or Developer or Person with regard to
implementation of any project under the Act or for carrying
out its functions under this Act and such Government
Agency or Local Authority or other Authority or Developer or
Person shall be bound to comply with such directions.
(3) The Infrastructure Authority shall have power to call
upon any Government Agency, Local Authority or any other
Body or Authority or Developer or Person to furnish
information, details, documents and particulars as may be
required by the Infrastructure Authority in connection with or
in relation to any project, which such Government Agency,
Local Authority or Body or Authority, Developer or Person,
shall furnish to the Infr astructure Authority without any delay
or default.
(4) The Infrastructure Authority shall have power to
inspect, visit, review and monitor any project and its
implementation, execution, operation and management
through its official or officials and the p ersons in charge of
Powers of the
Infrastructure
Authority.
16 [Act No.36 of 2001]
the project shall be bound to give full cooperation to the
Infrastructure Authority.
(5) The Infrastructure Autho rity shall have all powers to
enable to carry out its functions under the Act.
12. The Infrastructure Authority shall submit quarterly
report as regards its working and operation to the State
Government.
CHAPTER - III
INFRASTRUCTURE PROJECT DELIVERY PROCESS
13. Any private sector participant may participate in
financing construction, maintenance, operation and
management of Infrastructure Projects covered under the
Act.
14. Either the Infrastructure Authority or the Government
Agency or the Local Authority may identify or conceptualise
any Infrastructure Project. If the Authority identifies or
conceptualises any Infrastructure Project, then the same will
be referred by the Authority to the concerned Government
Agency or the Local Authority for its consideration and
further action. If the Government Agency or Local Authority
identifies or conceptualises any infrastructure project, then
the same will be referred to Infrastructure Authority for its
consideration, evaluation and further action as may be
required.
15. The Infrastructure Authori ty will prioritise pr ojects
based on demand and suppl y gaps, inter -linkages and any
other relevant parameters and create a project shelf.
16. The Government Agency or the Local Authority in
accordance with the advice , recommendations and
suggestions of the Infrastructure Authority shall submit the
Report to the
Government.
Participation in
infrastructure
project.
Project
Identification.
Prioritisation of
Projects.
Recommen-
dations by the
Infrastructure
Authority.
[Act No.36 of 2001] 17
project to th e Government along with the pro posed
concession agreement relating thereto for its conside ration
and sanction.
17. 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 su itable 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 Authority with the approval of the Infrastructure
Authority consider the proposal of the Bidder offering the
second most competitive bid for sanction.
18. The Government Agency or the Local Authority shall
ensure adequate competition in the consultant selection
process for any project. They may, frame the terms of
reference for consultant studies and in case of Category II
projects and present the same for approval and
modification, if necessary, by the Infrastructure Authority:
Provided that in the case of such selection proc ess
adequate weightage shall be given to the technical
capabilities.
Sanction by the
Government.
Consultant
selection.
18 [Act No.36 of 2001]
19. The Government Agency or the Local Authority may
adopt appropriate Developer Selection P rocess including
any of the following processes, namely:-
(I) DIRECT NEGOTIATIONS:
(i) 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 proprietary technology
or franchise w hich 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 re negotiate 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 renegotiat e the financial offer
based on the revised cost of the project.
Developer
selection
processes.
[Act No.36 of 2001] 19
(II) SWISS CHALLENGE APPROACH:
(i) The Swiss Challenge Approach will be followed in
any project belonging to Category -II initiat ed 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 adequ ate for
undertaking the project;
(iv) The Government Agency or t he Local Author ity
shall forward such suo -motu proposal to the Infrastructure
Authority along with its evaluation within the prescribed time
for the approval of the Infrastructure Authority;
(v) The Infrastructure Authority would then weigh the
technical, commercial and financial aspects of the Original
Project Proponent ‟s proposal and the concession
agreement along with the evaluation of the projects by the
Government Agency or the Local Authority and ascertain if
the scale and scope of the project is in line with the
requirements of the State and whether the sharing of the
20 [Act No.36 of 2001]
risks as proposed in the Concession Agreement is in
conformity with the risk -sharing frame work as adopted or
proposed by the Government for similar projects, if any and
if the project is in conformity with long term objective of the
Government;
(vi) If the Infrastructure Authority recommends any
modification in the technical, scale, scope and risk sharing
aspects of the proposal or the Concession Agreement, the
Original Project Proponent will consider and incorporate the
same and resubmit its proposal within prescribed time to
the Government Agency or the Local Authority;
(vii) If the Infrastructure Authority finds merit in such
suo-motu proposal, the Infrastructure Authority will t hen
require Government Agency or the Local Authority to invite
competing counter proposals using the Swiss Challenge
Approach giving adequate no tice as may be prescribed.
The Original Project Prop onent will be given an opportuni ty
to match any competing co unter proposals that may be
superior to the proposal of the Original Project Proponent. In
case the Original Project Proponent matches or improves on
the competing counter proposal, the project shall be
awarded to the Original Project Proponent, otherwise the
bidder making competing counter proposal will be selected
to execute the project;
(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;
[Act No.36 of 2001] 21
(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.
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) Th e 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;
22 [Act No.36 of 2001]
(vi) It will be open for the Government Agency or the
Local Authority to adopt one or two stage pro cess
depending upon the complexity of the Project;
(vii) The Government Agency or the Local Authority will
periodically inform the Infrastructure Authority of the
progress of all Projects undertaken through a two -stage bid
process.
20. In case a model contract for a Sector has not been
adopted or in case there are Deviations proposed vis -a-vis
the approved model contract for a Sector, then, the
Infrastructure Authority will formulate or approve the
contract principles as the case may be.
21. The Government Agency or the Local Authority will 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 & Management
cost for Projects having a definite scope;
Approval of
contract
principles.
Selection criteria.
[Act No.36 of 2001] 23
(vii) Highest equity premium; and
(viii) Quantum of State Sup port solicited in present
value;
(b) For Build Transfer, Build Lease and Transfer 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. In case of the competitive bidding process resulting
into a Sole Bid, the Govern ment Agency or the Local
Authority shall in consultation with the Infrastructure
Authority, either,-
(i) accept the Sole Bid, or
(ii) re-negotiate the financial offer, or
(iii) reject the Sole Bid.
23. In case the competitive bidding process does not
generate sufficient response and if even a Sole Bid is not
received, then the Government Agency or the Local
Authority shall in consultation with the Infrastructure
Authority 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.
Treatment of Sole
Bid.
Treatment of
limited response.
24 [Act No.36 of 2001]
24. (a) All proposals submitted by a Bidding Consortium
shall enclose a memorandum of understanding, executed
by all consortium members setting out the role of each of
the consortium members and the proposed equit y stake of
each of the consortium members with regard to a Project;
(b) The Lead Con sortium Member of a pre -qualified
Consortium cannot be replaced except with the prior
permission of the Infrastructure Authority and which
permission will be considered o nly 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 the Infrastructure
Authority.
25. The Government Agency or the Local Authority with the
approval of the Infrastructure Authori ty 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. The Infrastructu re
Authority will prescribe the norms for determining the
speculative or unrealistic bids.
26. Save as otherwise provided in the Act the Government,
or the Government Agency or the Local Authority wil l not
Treatment of Bid
submitted by a
consortium.
Speculative bids.
No negotiation on
financial or
commercial
proposal.
[Act No.36 of 2001] 25
negotiate with the Bidder on the financial or commercial
aspect of the proposal submitted by the Bidder.
27. (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
calender 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. 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 disclos ure of the Generic
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. 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
Bid security.
Generic Risks
Disclosure and its
allocation and
treatment.
Facilitation of
securitisation.
26 [Act No.36 of 2001]
may be fixed by the Government or by the Infrastructure
Authority to safeguard the successful implementation,
completion, working, management and control of the
project.
30. 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 the Infrastructure Authority, on the same terms and
conditions as applicable to the previous Developer or with
such modifications as may be specifically approved by the
Infrastructure Authority.
31. 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 Site during 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. The State Government may , by notification, establish a
Board to be called the “Conciliation Board” with effect Excerpt shown. Open the full act in Lexace.