THE government has barred equal joint ventures in public-private partnerships (PPPs) in the infrastructure sector as it looks to fix responsibility on the majority partner to ensure timely implementation of such projects.
A newly-issued set of guidelines for infrastructure PPPs also prohibits regulators from entering directly into such partnerships and bars government employees from becoming chairpersons of projects majority held by private partners, a finance ministry official said.
â€œThe guidelines have been considered by a committee of secretaries and approved by the finance minister and deputy chairman of Planning Commission. It would now apply to all central ministries and departments, statutory entities and central public sector undertakings,â€ said the official, requesting anonymity.
The bar on equal partnerships between private and public entities and also public and public entities in the infrastructure space aims to prevent a deadlock on matters of public interest by fixing responsibility of the project with the majority owner.
The move impacts a number of existing ventures in the power and transport sectors, including Delhi Metro Rail Corporation, a 50:50 joint venture between the central government and Delhi government.
The rules also prohibit regulators and entities such as Port Trust, Airports Authority of India, Indian Railways and National Highways Authority of India that have regulatory functions from undertaking construction and management of PPP projects.
They have to create a separate project-implementing entity to implement any future PPP projects.
The new rules have also barred consultants and advisors of public sector entities from being engaged in similar roles in the private entity created through a joint venture.
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