A PUBLIC PRIVATE PARTNERSHIP (PPP) SCHEMEruraldiksha.nic.in/data/guidelines/PURA Guidelines in English.pdf · A PUBLIC PRIVATE PARTNERSHIP (PPP) SCHEME ... Salient Features of Request

PROVISION OFURBAN AMENITIES

IN RURAL AREAS (PURA)

GUIDELINES

A PUBLIC PRIVATE PARTNERSHIP (PPP) SCHEME

Mission

Holistic and accelerated development of Holistic and accelerated development of compact areas around a potential

growth centre in a Gram Panchayat (or a group of Gram Panchayats) through

Public Private Partnership (PPP) framework for providing livelihood

opportunities and urban amenities to improve the quality of life in rural areas.improve the quality of life in rural areas.

Ministry of Rural DevelopmentGovernment of India

Published by:Ministry of Rural Development

Government of India

List of Abbreviations 2

Preface 3

1. Introduction 1. Background 52. MissionandObjectivesofthePURAScheme 63. Strategy 6

2. Planning and Implementation4. Planning 75. IdentifiedInfrastructureandUrbanAmenities 76. BusinessModel 87. Land 108. SelectionofPrivateDevelopers 109. Implementation 1110.FlowchartofPURAProjectCycle 1211.ProjectManagementandControl 12

3. Release of Funds12.EstimationofCapitalGrantandRelease 1313.FundsFlow 1314.CostofIndependentEngineer 14

4. Miscellaneous15.Audit 1516.GrievanceRedressalandDisputeResolution 1517.Arbitration 1518.RiskManagement 15

Annexures I. SalientFeaturesofExpressionofInterest(EoI) 16II. SalientFeaturesofRequestforProposal(RfP)Document 16III. SalientFeaturesofConceptPlan 18IV. SalientFeaturesofDetailedProjectReport(DPR) 18

V. SalientFeaturesoftheConcessionandStateSupportAgreement 19

Table of ConTenTs

ADB – AsianDevelopmentBank

BOT – Build,Operate&Transfer

CA – ConcessionAgreement

CAPEX – CapitalExpenditure

DoRD – DepartmentofRuralDevelopment,GovernmentofIndia

DPR – DetailedProjectReport

DRDA – DistrictRuralDevelopmentAgency

EC – EmpoweredCommittee

EFC – ExpenditureFinanceCommittee

EoI – ExpressionofInterest

GP – GramPanchayat

IE – IndependentEngineer

MNREGA – MahatmaGandhiNationalRuralEmploymentGuaranteeAct

MoRD – MinistryofRuralDevelopment,GovernmentofIndia

NIRD – NationalInstituteofRuralDevelopment

NRDWP – NationalRuralDrinkingWaterProgramme

NREGS – NationalRuralEmployementGuaranteeScheme

O&M – OperationsandMaintenance

OPEX – Operatingexpenditure

PAPs – ProjectAffectedPersons

PPP – PublicPrivatePartnership

PRIs – PanchayatiRajInstitutions

PSMC – ProjectSteeringandMonitoringCommittee

PURA – ProvisionofUrbanAmenitiesinRuralAreas

RfP – RequestforProposal

ROI – ReturnonInvestment

R&R – Rehabilitation&Resettlement

SGSY – SwarnjayantiGramSwarozgarYojana

SPV – SpecialPurposeVehicle

SSA – StateSupportAgreement

TA – TechnicalAssistance

TSC – TotalSanitationCampaign

List of AbbreviAtions

ProvisionofUrbanAmenitiesinRuralAreas(PURA)2

3

MinistryofRuralDevelopment (MoRD),Governmentof India has re-launched the scheme “Provision of Urban Amenities in Rural Areas”(PURA)asaCentralSectorschemeduringremainingperiodoftheXIPlan.MoRDwithsupportfromDepartmentofEconomicAffairsandthetechnicalassistanceofAsianDevelopmentBankintendstoimplementthePURAschemeunderaPublicPrivatePartnership(PPP)frameworkbetweenGramPanchayat(s)andprivatesectorpartners.Theschemeenvisagestwinningofruralinfrastructuredevelopmentwitheconomicre-generationactivitiesandisthefirstattemptatdeliveringabasketofinfrastructureandamenitiesthroughPPPintheruralareas.Itisanefforttoprovideadifferentframeworkfortheimplementationofruralinfrastructuredevelopment schemes andharnessprivate sectorefficiencies in themanagementof assets anddeliveryofservices.

Thescopeoftheschemeistoselectprivatepartnerstodeveloplivelihoodopportunities,urbanamenitiesandinfrastructurefacilitiestoprescribedservicelevelsandtoberesponsibleformaintenanceofthesameforaperiodoftenyearsinselectPanchayats/clusterofPanchayats.Privatesectorentitieshavingexperienceindevelopmentandmanagementofcommunity-orientedinfrastructureprojectsshallbeselectedthroughanopencompetitivebiddingprocessbasedonrigorousqualificationsandevaluationcriteria.Theselectedprivatepartnerswouldberequiredtoprovideamenitieslikewatersupplyandsewerage,roads,drainage,solidwastemanagement,streetlightingandpowerdistributionandundertakesomeeconomicandskilldevelopmentactivityaspartofthePURAproject.Theprivatepartnersmayalsoprovide‘add-on’revenue-earningfacilitiessuchasvillagelinkedtourism,integratedruralhub,ruralmarket,agri-commonservicescentreandwarehousingetc.inadditiontotheabove-mentionedamenities.WherethePURAprojectspansseveralPanchayatsinacluster,theprivatepartnerwouldproposesub-projectswiththePURAelementsforeachofthePanchayats.

The leveraging of public funds with private capital and management expertise for creation and maintenanceofruralinfrastructureistheessenceofthePURAscheme,whichisenvisionedtoactasthecatalystnotonlyfor convergence between different infrastructure development schemes but also for the new model for themanagementofurbanisationofruralareas.

PrefAce

Preface

5

introDUction

1. Background

1.1 Lack of livelihood opportunities, modernamenities and services for decent living in ruralareas lead to migration of people to urban areas.There are wide gaps in the availability of physicaland social infrastructure between rural and urbanareas. To address these issues, the President ofIndia Dr. A.P.J. Abdul Kalam highlighted a vision oftransformation of rural India through launching amega mission for Provision of Urban Amenities inRuralAreas(PURA).Duringhisaddresstothenationon eve of Republic Day 2003, Dr. Kalam visualizedproviding four connectivities: physical connectivity,electronic connectivity, knowledge connectivityleading to economic connectivity of rural areas.PURAwasenvisaged as a self-sustainable andviablemodelofservicedeliverytobemanagedthroughanimplementation framework between local people,public authorities and the private sector. TheGovernmentsupportwouldbeintheformoffindingthe right type of management structure to developand maintain rural infrastructure, empowering suchmanagementstructureandprovidinginitialeconomicsupport. Subsequently, Prime Minister of India also

1announced implementation of PURA scheme in hisIndependenceDayspeechon15thAugust2003.

1.2 Seven pilot projects were implemented duringthe 10th Five Year Plan in Basmath (Maharashtra),Bharthana (Uttar Pradesh), Gohpur (Assam),Kujanga (Orissa),Motipur (Bihar),Rayadurg (AndhraPradesh) and Shahpura (Rajasthan). An evaluationstudyof thesepilotprojectsbyNational InstituteofRural Development (NIRD) identified the necessityof community and private sector participation,need for factoring infrastructure development withlead economic activities and livelihoods creation,requirementofprojectsiteselectiononthebasisofgrowthpotentialandneedforconvergencewithotherschemesofruraldevelopmentorotherDepartments.BasedonthefindingsoftheevaluationstudybyNIRD,comments of various Ministries/Departments, feed-backreceivedduringconsultationswithprivatesectorrepresentatives and officials of State Governments,and the recommendationsof the consulting teamofAsianDevelopmentBank(ADB),theschemeofPURAhas been restructured for implementation on pilotbasis during 11th Five Year Plan as a Central Sectorscheme.

Introduction


2. Mission and Objectives of the PURA Scheme

2.1 Mission:Holistic and accelerated developmentofcompactareasaroundapotentialgrowthcentreina Gram Panchayat (or a group of Gram Panchayats)through Public Private Partnership (PPP) frameworkfor providing livelihood opportunities and urbanamenitiestoimprovethequalityoflifeinruralareas.

2.2 Objectives: The primary objectives of thescheme are the provisionof livelihoodopportunitiesandurbanamenitiesinruralareastobridgetherural–urbandivide.

3. Strategy

3.1 Public Private Partnership (PPP) – the Distinguishing Feature: The objectives of PURAare proposed to be achieved under the frameworkofPPPbetweenGramPanchayatsandprivatesectorpartner. Core funding shall be sourced from theCentralSectorschemeofPURAandcomplementedbyadditionalsupportthroughconvergenceofdifferent

Central Government schemes. The private sectorshall also bring on board it’s share of investmentbesidesoperationalexpertise.Theschemewouldbeimplementedandmanagedby theprivate sectoronconsiderationsof economic viability butdesigned inamannerwherebyit is fullyalignedwiththeoverallobjectiveofruraldevelopment.Toattracttheprivatesector, there is a need to design the scheme thatwould be ‘project based’ with well defined risks,identified measures for risk mitigation and riskssharing among the sponsoring authority (GramPanchayat),GovernmentofIndia,StateGovernmentandthePrivatePartner.

3.2 Pilot-testing and Upscaling: Through theimplementationofproposedpilotprojects,theuniquefeaturesofthisschemewouldbetestedonthegroundthat will provide lessons for upscaling in the future.Besides, the entire process shall help strengthen theinstitutionalabilityofaGramPanchayattoundertakePPP and help pilot-test the viability of PPPs in ruralinfrastructuredevelopment.Basedontheexperienceof thepilots, the schemewouldbe suitablymodifiedforscalingupinfuture.

4. Planning

The Private Partner selected to undertakePURA projects shall identify a Gram Panchayat/a cluster of geographically contiguous GramPanchayats for a population of about 25,000–40,000. Whereas, the cluster would be the projectarea,theremaybesub-projectstocovereachofthePanchayats within the cluster. Alternatively, a largesingle Panchayat could individually provide criticalmass to make the project viable. In the pilot phase,the Private Partner is given the flexibility to identifyand select the Gram Panchayat(s) for undertaking

PURAprojectsbasedontheirfamiliaritywiththeareaorpastexperienceofworkingatthegrassrootslevel.InthisidentifiedPURAarea,thePrivatePartnershallplanforthedevelopment/re-developmentofselectedinfrastructureservicesalongwitheconomicactivities,afterundertakingbaselinestudies.

5. Identified Infrastructure and Urban Amenities

5.1 A list of infrastructure, urban amenities andeconomicactivitiestobeprovidedunderPURAareasfollows:

2

(a) Amenities/ActivitiestobeprovidedunderMoRDSchemes(Mandatory)

(b) AmenitiestobeprovidedunderSchemesofotherMinistries(non-MoRDSchemes)–illustrativelist

(c) Add-onProjects(Revenueearning,peoplecentricprojects)–illustrativelist

1. WaterandSewerage2. ConstructionandmaintenanceofVillage

Streets3. Drainage4. SolidWasteManagement5. SkillDevelopment6. DevelopmentofEconomicActivities

7. VillageStreetLighting8. Telecom9. Electricitygeneration,etc.

10. Villagelinkedtourism11. Integrated Rural Hub, Rural

Market.12. Agri – Common Services Centre

andWarehousing13. Anyotherrural–economybased

project

7

2 PLAnninG AnD iMPLeMentAtion

PlanningandImplementation


Amenities under MoRD Schemes: ThePrivatePartnershallberesponsiblefordeliveringamenities and services such as water andsewerage, construction and maintenance ofvillagestreets,drainage,solidwastemanagement,skilldevelopmentanddevelopmentofeconomicactivities under the following ongoing schemesof MoRD: Swarnjayanti Gram SwarozgarYojana (SGSY), National Rural Drinking WaterProgramme (NRDWP), Total SanitationCampaign(TSC),etc.TheconvergenceoftheseschemesshallbeattheleveloftheDistrictRuralDevelopment Agency (DRDA) through whichthe funding under these schemes will be madeavailabletothePrivatePartner.

Amenities under non-MoRD Schemes: ThePURAmayincludeschemesofotherMinistriesthat are available “on tap” as some areas ofcriticalinfrastructure(urbanamenities)necessaryfor the project are not within the purview ofMoRDsuchasMinistryofNewandRenewableEnergy(forvillagestreetlightingandelectricitygeneration) and Ministry of Communicationsand Information Technology (for telecomservices)etc.ThePrivateDevelopershallaccessthesupportundersuchschemesofrelevantnon-MoRD Ministries and dovetail into PURA fordeliveringtheidentifiedurbanamenities.Althoughthelistinparagraph5.1isillustrative,theprivatepartnerwouldbeencouragedtoincludeasmanyofsuchschemesasthelocalconditionspermit.

Add-on Projects:ItisnecessarythatthePrivateDeveloper create a pipeline of “commerciallyviable” and “people centric” projects in thenatureofadd-onstothelistofurbanamenitiesto be provided. To ensure delivery of allelements of the project, add-ons submitted aspartoftheDetailedProjectReport(DPR)shallbecome ‘essential’/‘mandatory’ for the purposeof performance guarantee. Such add-ons willgenerateeconomicandlivelihoodsopportunitiesandarepreferablydevelopedinpartnershipwiththeGramPanchayatandmayinter-aliainclude:

Villagetourismprojects–thatprovidedirectemployment to locals and opportunitiesfor incomes to local artisans, performingartists,etc.

Settingupgoodskilldevelopmentinstitution–thiswouldlinkupwiththeeconomicactivityinitiatedintheproject.

a.

b.

c.

i.

ii.

Integrated rural business centres – thatwill help the local economy to upgrade tocommercialscale.

Itisexpectedthatatleastonesuchactivitywouldbeincludedintheproject.

6. Business Model

Theleveragingofpublicfundswithprivatecapitalandmanagement expertise for creation and maintenanceof rural infrastructure is the essence of the PURAscheme.

6.1. Funding: Funding for projects under PURAschememaycomefromfoursources:MoRDschemes,non-MoRD schemes, private financing and CapitalGrantunderPURA.

MoRD Schemes:As PURA scheme envisagesconvergence of various schemes and a sus-tainable framework for long term maintenanceof assets, most of the capital expenditure(CAPEX) will have to come from Governmentschemes. To manage effective coordination inthedeliveryofschemesthatareadministeredbydifferentministriesanddepartments,mainlytheschemes administered by the Ministry of RuralDevelopmentsuchasSGSY,NRDWP,TSC,etc.willbeconvergedinCAPEXprovisionofPURAprojects.Onlycommunitydevelopmentschemeswould ordinarily be included as the PrivatePartnerswouldfinditdifficulttomanageindividualbeneficiary schemes. An omnibus provisionwill be made in all such schemes to allow theexecutionthroughthePrivatePartnerinadditionto Panchayats or Government Departments.As a concessionaire for the Panchayat or theGovernment Department, the Developer shallsourcefundingthroughtheidentifiedschemes.Theimplementationwillbedonewithintheguidelinesof therespectivescheme.However, theservicestandardswouldbekeptascloseaspossible tothe service standards prescribed for the urbanareas.InthespecificinstanceofconvergencewithNational Rural Employment Guarantee Scheme(NREGS),onlythoseworkscanbetakenunderNREGSwhicharepermittedaspertheprovisionsofMahatmaGandhiNationalRuralEmploymentGuarantee Act (MNREGA) 2005. An effortshall bemade todomanual andunskilledworkcomponents under NREGS for those activities

iii.

a.

9

which will be common to PURA projects andthepermittedlistofactivitiesinMNREGA2005.GramPanchayat(s)willbeaskedtocompletesuchworksfromNREGSfundsthroughtheprescribedmechanismofMNREGA job cardholders. SuchworkscarriedthroughNREGSwillnotformpartofprojectcostsunderPURA.

Non-MoRD Schemes: The Private Partnershall also be responsible for delivering certainservices under schemes of other Ministries, aspertheguidelinesofthoseschemes.Alternatively,the concerned Ministry may make fundingavailableunderthoseschemesthroughDRDA.

Private Funding:Itispossiblethattheessentialinfrastructure may not get fully funded byGovernment schemes wherein the Developershall invest somecapitalof itsownto fund theCAPEXof such infrastructure and tomeet theoperationsandmaintenance(O&M)costs.O&Mofinfrastructureassetsandprovisionofserviceswillbeforaprojectperiodof10years.Financingof commercially viable add-on projects will bedonefullythroughprivatefunding.

Capital Grant under PURA: The PrivateDeveloperisgivenflexibilitytochoosesuitable

b.

c.

d.

revenuegenerating/self-sustainableprojectsasadd-ons, in consultation with the Panchayatanditisexpectedthatthiswouldpartsubsidisethe maintenance cost of infrastructure. Sincethe “returns” for the Developer will be onlyfrom the revenues that can be generatedwithin the overall framework of the ruraleconomy and the revenue base will continuetobethin,thereisaprovisionofCapitalGrantunder PURA scheme. The viability gap thatmayexistinaPURAprojectwillbemetfromthe Capital Grant under which upto 35% ofprojectcostcanbegivenasagranttothepilotprojects.

6.2 Project Cost:TheprojectcostforthepurposeofdeterminingCapitalGrantshallbereckonedbytotalof (i) CAPEX, (ii) Operating expenditure (OPEX) ofessentialinfrastructure(Urbanamenities)andAdd-oninfrastructureforaperiodoftenyears,and(iii)deficitson the Return on Investment (ROI) for the privatesector.ThetotalcostofeachPURAprojectshallnotexceedRs.120crore.

6.3 Theillustrativelistofurbanamenitiesalongwiththeirfundingsourceandimplementationmodalityisasfollows:

Type of Infrastructure Funding Implementing Agency

CoreFacilities/ExternalinfrastructurelinkagestothePURAarea(roadtothevillage,electricitytothevillage,bulkwatersupply,etc.)

UnderexistingschemesofGovernmentofIndia/StateGovernment

GovernmentofIndia/StateGovernmentortheiragencies

UrbanAmenities:A. MoRD Schemes (drinking

water supply and sewerage,construction & maintenanceof village streets, drainage,solid waste management, skilldevelopment,anddevelopmentofeconomicactivity)

ExistingMoRDschemesandfundingbyPrivateDeveloperunderPURA

PrivateDeveloper–BuildOperateandTransfer(BOT)modelunderPURA

B. Schemes of other Ministries(telecom, street lighting,electricity, etc. outside ofMoRDambit)

Existingschemesofnon-MoRDMinistriesandfundingbyPrivateDeveloperunderPURA

PrivateDeveloper–BuildOperateandTransfer(BOT)modelunderPURA

Add-onFacilities:(villagelinkedtourism,ruralmarketingcentre,agriculturecommonservicescentre,industrialestateforvillageindustries,technical/vocationaltraininginstitutions,etc.)–illustrativelist

PrivateDeveloper PrivateDeveloper



7. Land

A necessary element for PURA projects is theavailabilityofland.Forthepublicamenities,landwillbemade available freeof cost byGramPanchayat/State Government. For add-on facilities, if land isprovided by Gram Panchayat/State Government,the revenue will be appropriately shared betweenGram Panchayat and private partner throughmutual agreement and such add-on facilities shallrevert back to Gram Panchayat/State Governmentat the end of the concession period. If land is notprovided by Gram Panchayat/State Government, itwill be purchased by the Private Developer fromthe open market, but its cost will not be includedin theproject costing.AsPURAenvisages creationof livelihood opportunities, while approving theDPRsitwillbeensuredthatthetransferofcommonlandsforPURAprojectsfromGramPanchayat/StateGovernment does not affect livelihoods security oflocal poor. Furthermore, PURA is an attempt tokickstartaprocessofcreationoflivelihoodsandurbanamenitiesinapotentialgrowthcentreinruralareas.Hence,PURAprojectwillnotbeallowedtobecomean instrumentality for undertaking Rehabilitation &Resettlement (R&R) of Project Affected Persons(PAPs)inandaroundanongoing/proposedeconomicproject.

8. Selection of Private Developers

8.1 Bidding Process

The selection of Private Developers wouldbe done through an open competitive biddingprocess. An ‘Expression of Interest’ (EoI)would be called from reputed infrastructuredevelopment companies through an openadvertisement (salient features of EoI placedat Annexure I). The interested bidders shallsubmit their response on the basis of whichshort-listingshallbedone.

ThedraftRequestforProposal(RfP)documentwould be issued to the short-listed bidderswho will be invited to a pre-bid conferencefor consultations. Thereafter, the final RfPdocument (salient features of RfP documentplaced at Annexure II) shall be issued. Theshort-listed bidders shall submit their detailedproposals which will include Concept Plans

a.

b.

(salient features of a Concept Plan placedat Annexure III) along with the consent fromthe participating Gram Panchayat (s) and theconcerned State Governments. A format fortheconsent lettershallbeprovidedaspartofthebiddingdocuments.

8.2 Evaluation of Proposals:Response toEoIsshall be evaluated vis-à-vis the pre-qualificationcriteria as laid out in the EoI. At the stage ofsubmission of bids in response to the RfP, therewould be no financial bidding. The bidders wouldbe evaluated on their technical capability andassignedscoresasperthepre-approvedevaluationmethodology.Theproposals/ConceptPlansreceivedfromvariousbidderswillbeevaluatedbyaProjectScreening and Monitoring Committee and scoredand ranked as per the criteria set out in the RfPdocument.Thetoprankedbidderswouldbeselectedand mandated to prepare DPRs (salient featuresof a DPR placed at Annexure IV). The DPRs shallbe appraised by Project Screening and MonitoringCommittee. Thereafter, the DPRs and CapitalGrant shall be sanctioned by an inter-MinisterialEmpoweredCommitteeandthedifferentagreementsexecuted. Inthepilotphase,whiletherewillbeanemphasis upon rural development priorities, thereshall also be an effort to dovetail the Developers’perspectiveonaneconomicallyviableproject.Eachproposal shall also be examined from the pointof view of inclusiveness and balanced geographicspread.

8.3. Agreements between Stakeholders: Following agreements will be executed delineatingtheroles, responsibilities, liabilitiesandobligationsofdifferentstakeholders:

Concession Agreement: There shall bea Concession Agreement (salient features ofConcessionAgreementplacedatAnnexureV)betweentheGramPanchayatasthesponsoringauthority(grantor)andthePrivateDeveloper(concessionaire). The Concession Agreementshall include details of minimum service levelstandards, performance guarantees, etc.The Concession Agreement will also enablethe Private Developer to collect reasonableuser charges for the services and amenitiesprovided.Althoughusercharge for theurbanamenities to be provided under Governmentschemes is not compulsory in nature, it is

a.

11

desirable that some fees to theextent that itcan be reasonably borne by the beneficiariesbecharged.

State Support Agreement: There shall bea State SupportAgreement (salient featuresofState Support Agreement placed at AnnexureV) between the Central Government, StateGovernment and the Private Developer. ThecommitmentofStateGovernmentfordeliveringthe core facilities like roads, bulk water andpower to the PURA area within defined time-linesshallbemadeaspartofthisagreement.

8.4. Project Committees

AProjectScreeningandMonitoringCommittee(PSMC)isconstitutedunderthechairpersonshipof Joint Secretary, Department of RuralDevelopment(DoRD)whichshallexamineandevaluate the EoIs, proposals including ConceptPlans submitted in response to RFPs and theDPRs prepared by Private Developers. ThePSMCshallalsoberesponsibleformonitoringofprogress of sanctioned projects.ThemembersofthePSMCshallbeasfollows:

JointSecretary,DoRD–Chairperson

RepresentativeofDepartmentofEconomicAffairs–Member

Representative of Planning Commission –Member

RepresentativeofDepartmentofDrinkingWaterSupply–Member

Representative of Ministry of New andRenewableEnergy–Member

Representative of Ministry of Power –Member

Representative of Ministry of PanchayatiRaj–Member

Representative of the concerned StateGovernment–Member

Director(PURA)–MemberConvener

TheCommitteemayassociateanyotherofficer/persontoassistit.

b. An inter-Ministerial Empowered Committee(EC) under the chairpersonship of Secretary,MoRDcomprisingthefollowingisconstitutedfor

b.

a.

i.

ii.

iii.

iv.

v.

vi.

vii.

viii.

ix.

approvingtheprojectproposals.TheECshallgiveapprovaltodifferentstagesofprojecttransactionandtakealldecisionsincidentaltotheproject.

Secretary,RuralDevelopment–Chairperson

Secretary,DepartmentofEconomicAffairs/or representative not below the rank ofJointSecretary–Member

Secretary, Planning Commission/orrepresentativenotbelowtherankofJointSecretary–Member

Secretary, Drinking Water Supply/orrepresentativenotbelowtherankofJointSecretary–Member

Secretary,MinistryofNewandRenewableEnergy/or representative not below therankofJointSecretary–Member

Secretary, Power/or representative notbelowtherankofJointSecretary–Member

Secretary,PanchayatiRaj/orrepresentativenot below the rank of Joint Secretary –Member

AdditionalSecretaryandFinancialAdvisor,MoRD–Member

Principal Secretary/Secretary, RuralDevelopment of the concerned StateGovernment–Member

Joint Secretary (PURA), Department ofRuralDevelopment–MemberConvener

The Empowered Committee may invite any otherofficerorexpertaccordingtoneed.

9. Implementation

TherolloutoftheimplementationactionplanovertheconcessionperiodshallbeoutlinedintheDPR.ThePrivateDevelopershallputinplaceanimplementationaction plan for the different sub-projects of PURAoveraconstructionperiodofmaximumthreeyearsandanoperationsandmaintenance(O&M)periodoftenyearsfromthecommercialoperationdateorthedateofcompletionofconstruction.InordertoensurepropermonitoringandsupervisionofperformancebythePrivateDeveloper,anIndependentEngineerwillbeprovidedtothePURAclusterofGramPanchayat(s)to supervise and monitor performance during theprojectlifecycle.

i.

ii.

iii.

iv.

v.

vi.

vii.

viii.

ix.

x.



11. Project Management and Control

11.1 A dedicated project management team in thePURADivisionofMoRDshalloverseeandcoordinateall activities pertaining to the implementation ofthe scheme under the overall guidance of ProjectScreening and Monitoring Committee. AsianDevelopment Bank (ADB) is supporting MoRDthroughaTechnicalAssistance(T.A.)programmeforpolicy framework development, institutionalisationofPPPunitwithinMoRD,capacitybuildingofMoRDand identified Gram Panchayats and rollout of pilotprojects.

11.2 Appropriatemanagementcontrol,reportingandqualityassurancemechanismsshallbeput inplacetoenabletimelyevaluationandimpactassessmentofthePURAscheme.

11.3 To enhance the generic acceptability ofthe PURA scheme and to improve the quality ofprojects therein, appropriate capacity building ofGram Panchayat(s), officials of DRDAs and StateGovernments shall be undertaken along with anoutreach and communication plan, as part of theADBT.A.programme.

Issueof“LetterofAward”toqualifiedBiddersforpreparationofDPRs

SubmissionofProposalsincludingConceptPlan(withtheconsentofGPandtheState

Government)frominterestedBidders

PreparationofDPRsbyPrivateDevelopers

EvaluationofProposalsbyProjectScreeningandMonitoringCommitteeandsanctionbyinter-

MinisterialEmpoweredCommittee

AppraisalofDPRsbyProjectScreeningandMonitoringCommitteeandsanctionbyinter-

MinisterialApprovalCommitteeincludingapprovalofCapitalGrant

IssueofExpressionofInterest(EoI)

ResponsetoEoI

Short-listingofinterestedPrivateDevelopers

IssueofdraftRequestforProposal(RfP)documenttotheshort-listedPrivateDevelopers

Pre-bidMeetingtoobtainsuggestionsonthedraftRfPandConcessionAgreementfromtheshort-

listedBidders

IssueoffinalRequestforProposal(RfP)documenttotheshort-listedPrivateDevelopers

HandoverofprojectfacilitiestotheGramPanchayatsattheendoftheconcessionperiod

MonitoringandimpactassessmentofPURAprojectsbyProjectScreeningand

MonitoringCommittee

O&MofprojectfacilitiesbyPrivateDeveloper

ProjectExecutionbyPrivateDeveloper

ExecutionofConcessionAgreementsbetweenthePrivateDevelopersandparticipatingGram

PanchayatsandStateSupportAgreement

10. Flowchart of PURA Project Cycle

12. Estimation of Capital Grant and Release

ThoughCapitalGrantwillbe limitedtoamaximumof 35% of project cost, the actual Capital Grantadmissible will vary from project-to-project. Thetotal Capital Grant approved for the pilot projectsduring the 11th Five Year Plan shall be borne fromthe Plan outlay of Rs. 248 crore. During this pilotphase, the cost of each PURA project shall belimited to a maximum of Rs. 120 crore, for thepurposesofdeterminingCapitalGrant.TheDetailedProject Report (DPR) would form the basis fordeterminingtheexactamountofCapitalGrantrequiredfor each pilot project. The final cost compositionand Capital Grant would be approved by an inter-Ministerial Empowered Committee constitutedfor the purpose. The grant will be released in fourinstallments (linked with completion of milestones)as follows, assuming that the concessionwill be fortenyearsandtheconstructionphasewillbeofthreeyears:

1stinstallment(25%)–onsigningoftheconcessionagreement.

a.

2ndinstallment(25%)–oncompletionofoneyearfromdateofsigningofconcessionagreement.

3rd installment (25%) – on completion of twoyears from date of signing of concessionagreement.

4th installment (25%) – on completion ofconstructionof those sub-projects as approvedintheDPR.

However, in cases where milestones are achievedbefore the afore-mentioned time projections,the release of installments may be accordingly re-scheduled.

13. Funds Flow

13.1 The sanctioned installment of Capital Grantshall be released by MoRD to the District RuralDevelopment Agency (DRDA) which will be keptin an escrow account. It shall be released to thePrivate Developer upon completion of approvedmilestones linked to time-lines after certification bythe Independent Engineer and concurrence of theconcerningGramPanchayat(s).

b.

c.

d.

13

reLeAse of fUnDs3

ReleaseofFunds


13.2 The funds under other schemes of MoRDshall also be released to the Private Developerthrough placement of funds in the same escrowaccount managed by DRDA upon certification bythe Independent Engineer and concurrence of theconcerning Gram Panchayat(s). Similarly, otherMinistriesfornon-MoRDschemesinaPURAprojectmay make funding available under those schemesthroughDRDAs.

13.3 The Gram Panchayat(s) shall give theirconcurrence within one week of certification byIndependentEngineer,failingwhichtheyhavetoassignreasons thereof. The matter shall then be referredto the District Magistrate/Deputy Commissioner/

Collectorwhowillexaminethesameanddecidewithinoneweek’stime.

13.4 TheProjectDirector,DRDA is responsible fortimelyreleaseoffundsbyDRDAasperguidelines.

13.5 The Private Developer shall maintain a projectescrow account for all receipts and payments onaccountofPURAproject.

14. Cost of Independent Engineer

ThefeesoftheIndependentEngineerwillbereleasedthroughDRDA,butnot included in theprojectcostestimationfordeterminationofCapitalGrant.

15. Audit

Theauditingprocessandcriteriaforauditshallfollowthe guidelines issued by Government of India fromtimetotime.

16. Grievance Redressal and Dispute Resolution

An appropriate grievance redressal mechanismshall be constituted under the chairpersonshipof the concerned District Magistrate/DeputyCommissioner/CollectorofthedistrictwhereinthePURA project is being implemented for handlinglocal level grievances. Similarly, a mechanism forgrievance redressal shall also be institutionalizedunderthechairpersonshipofJointSecretary,MoRD

for handling grievances wherein intervention ofMoRDisrequired.

17. ArbitrationSecretary,MoRDistheauthoritytoarbitrategrievancesanddisputes,whereverrequired.

18. Risk ManagementThekeyrisksassociatedwiththeimplementationofPURApilot projectsmay involveCentralGovernment, StateGovernment,GramPanchayatorthePrivateDeveloper.TheriskmitigationinthisregardwillbeguidedbylegallyvettedConcessionaswellasStateSupportAgreement.Incaseofdefaultbyanyofthestakeholders,theaffectedstakeholderwill be appropriately compensated as perprovisionsintherelevantagreement.

15

MisceLLAneoUs4

Miscellaneous


1. EoIsshallbeinvitedfromprivatesectorentitieshaving experience in development/construction andmanagement of community-oriented infrastructureprojects, either as a singleentityor as a consortiumwhomeetfollowingqualificationcriteria:

AminimumnetworthofRs.25crore,

Experience of developing infrastructureprojects having a cumulative value of at leastRs.50crore.

i.

ii.

2. Community-oriented infrastructure includeswatersupplyandsewerage,agri-businessinfrastructure,solidwastemanagement,publicroads,powerdistribution,socialinfrastructurelikehealth,education,etc.

3. The applicants will be required to submitnecessary documents/certificates in support ofthe qualification mentioned above and shall includeorganizationalbrochuresandauditedannualfinancialstatements(forthelastthreefinancialyears).

AnneXUres

Annexure I – Salient Features of Expression of Interest (EoI)

Annexure II – Salient Features of Request for Proposal (RfP) Document

The applicants shortlisted at the EoI stage willbe issued the Request for Proposal (RfP)document. The RfP shall contain the following keyfeatures:

1. Scope of Work: The Private Developeris required to construct, develop or redevelop as

applicable, operate andmaintain the urban amenitiesandadd-onfacilitiesthroughouttheconcessionperiodand demonstrate performance standards prescribedforeachoftheamenities/facilities.

2. Experience to be demonstrated by the bidder: Bidderswho intendtoundertakethePURA

17

project would be required to demonstrate thefollowingexperience:

Havingundertakeninfrastructureprojectsinthepast,preferablyonaPPPmode.

Ability and resources to engage with thestakeholders concerned to create a sustainableproject.

Ability to raise finances to meet capital andoperating expenses (as required) for theproject.

3. Definition and Structure of Participating Entity: Thebiddermayapplyasasingleentityorasagroupofentities (“Consortium”)to implementtheprojectasperthefollowingguidelines:

Asingleentityshallbeacompanyandwouldneedtomeettheselectioncriteriaonitsown(alongwithdefinedAssociates).

A consortium may consist of maximum of6membersandtheLeadMembershallnecessarilybeacompany.Experienceofallthemembersinthe Consortium would be considered formeeting the technical eligibility criteria.However, the financialeligibilityrequirementswould need to be satisfied by the “LeadMember”of the consortium.Othermembersofaconsortiumcouldbeofanylegalstructuresuch as a firm, company, corporation,society, trust, Government, State or agencyofaState.

4. Formation of a Special Purpose Vehicle (SPV): A single entity may form a Special PurposeVehicle (SPV)1, to undertake the project. However,formation of a SPV would be mandatory for aconsortium.

5. Conditions for formation of the SPV: Asingleentity formingaSPVto implement theprojectshallhaveanequityshareofat least51% in theSPV

i.

ii.

iii.

i.

ii.

atalltimesduringtheconcessionperiod.Incaseofaconsortium:

The Lead Member should hold equity sharecapitalofnotlessthan51%(fiftyonepercent)ofthesubscribedandpaidupequityoftheSPVatalltimesduringtheconcessionperiod.

The other members whose technical capabilityhasbeenutilizedforthepurposesofqualificationshouldholdequitysharecapitalnotlessthan11%(eleven percent) of the subscribed and paid upequityoftheSPVforaperiodoffiveyearsfromthedateofsigningoftheconcessionagreement.

6. Criteria for evaluating the capability of the Bidder:TheabilityofabiddertoundertakethePURAprojectwouldbeevaluatedthroughtwoparameters:

TechnicalCapability

FinancialCapability

i. Technical Capability: The technical capabilityrequirementsareassetoutbelow:

Project experience in development/construction ofcore infrastructure – which may include irrigation,roads, water supply, sewerage, drainage, solid wastemanagement,power,InformationandCommunicationTechnology(ICT),etc–projectsofatleastRs.50crore.Basedonthisexperience,biddersshallbescoredandshort-listed.

ii. Financial Capability: The bidder shalldemonstrateafinancialcapabilityofhavingminimumnetworthofRs.25crore.Noscoringisenvisaged.

7. Evaluation and Selection of Bidders: Thebidderswouldbeevaluatedontheirtechnicalcapabilityandassignedscoresaspertheevaluationmethodologyin theRFP document. The bidderswould be rankedon the basis of an experience score and selected.A“Letter of Award” would be issued to the selectedPrivateDevelopers.

i.

ii.

i.

ii.

1 AcompanyformedunderCompaniesAct,1956.

Annexures


Annexure III – Salient Features of Concept Plan

As part of the response to the RfP, the biddershall submit a Concept Plan and consent of theidentified Gram Panchayat(s) and the concernedState Government. The Concept Plan would needto set out the project area details, the approachandstrategyforimplementation,projectcomponents,etc.TheConceptPlansubmittedbythebidderwouldbe reviewedby a Project Screening andMonitoringCommittee within MoRD to check for complianceto norms and objectives of the PURA Scheme.The indicative contents of the Concept Plan are asfollows:

1. Details of the cluster

2. Concept description and demonstration that the same adheres to “PURA” principles

Abriefdescriptionoftheurbanamenitiesandadd-onfacilities.

i.

3. Identify and propose infrastructural improvements

CapitalandO&Mcosts

4. Implementation Plan

In-principle approval of the participatingGPsandothersResourcesandutilizationTimelinesKeyinterventionsandplan

5. Viability analysis

FinancingPlan,dulyidentifyingtheCentralGovernment/State Government schemesavailable

6. Next steps

Developmentstudies–scope/time/costs

Keyrisksandmitigationmeasures

i.

i.

ii.iii.iv.

i.

i.

ii.

Annexure IV – Salient Features of Detailed Project Report (DPR)

The bidders selected through the RfP stage, wouldbe required to prepare a DPR for the Panchayat(s)based on the Concept Plan submitted earlier. TheDPRswouldneedtobesubmittedwithinsixmonthsfromissueof“LetterofAward”byMoRD.ThesamewouldbereviewedandapprovedbyMoRD,withorwithoutmodifications.TheDPRwouldneedtoprovidebaseline information on the existing infrastructurescenario, infrastructure improvements required andthe detailed cost estimates for the same along withthe plan for implementation. Periodic assessment ofservicelevelstandardsforvariousurbanamenitiesandthemechanismtoaddresschangesinservicedeliverylevelswouldalsoneedtoformpartoftheDPR.TheindicativecontentsoftheDPRare:

1. Project description

Idea

Clusterdetailsanddescription

Urbanamenitiesandadd-onfacilities

Ongoing and proposed MoRD and non-MORDschemesinthecluster

i.

ii.

iii.

iv.

2. OperatingFramework

Compliance with guidelines of PURAscheme

Demandassessment–Futurerequirementof amenities leading to sizing andcoverage

Baselineinformationfortheurbanamenitiesandadd-onfacilities(tobecertifiedbytheIndependent Engineer and concurred bytheGramPanchayat).

Usage surveys and willingness to paysurveys,ifrelevant

Methodology for periodic assessment ofservice level standards and mechanism toaddresschangeindeliverystandards.

3. Indicative bill of quantities, cost estimates and financing plan

4. Feasibility analysis and Capital Grant amount required

i.

ii.

iii.

iv.

v.

19Annexures

Annexure V – Salient Features of the Concession and State Support Agreements

5. Timelines for implementation

The Project Screening and Monitoring Committeeshall scrutinize the DPRs for correctness and

accuracy.IntheeventthatMoRDdecidestoabandontheprojectaftertheapprovalofDPR,thecourseofaction shall be as per provisions made in the RfPdocument.

On approval of the DPR by MoRD, the PrivateDeveloper would execute the ConcessionAgreement and the State Support Agreement withrespectiveparties.TheConcessionAgreementshallcontain the standard clauses relating to definitions,conditionsprecedent,representationandwarranties,forcemajeure, assignment and charges, liability andindemnity, dispute resolution, governing law andjurisdiction, variation, waiver, entire agreement,severability, third parties, successors and assigns,notices, language, counterparts, etc. Provisionsrelating to performance obligations, key events ofdefault and recovery of payments are describedbelow:

1. Key obligations of MoRD

Selection of Private Developer(s) forimplementingthePURAprojects.

TimelydisbursementofCapitalGrant.

Making available funding under differentongoingschemesofMoRD.

Establishing a Project Screening andMonitoring Committee for review ofProposals and DPRs submitted by thebidders.

Appointment of an Independent Engineer(IE) to monitor the implementationand performance obligations of theconcessionaire throughout theconcessionperiod.TheIEshallbeanexperiencedfirmfamiliarwithprojectsofthisnature.

2. Key obligations of State Government

Discharging itsobligationsundertheStateSupportAgreementexecutedbetweentheStateandconcessionaire.

Facilitate obtaining necessary approvals/clearancesfromtheconcernedauthoritiesforimplementationoftheproject.

i.

ii.

iii.

iv.

v.

i.

ii.

Extend necessary assistance to GPs fordischarging their obligations under theconcessionagreements.

Making available external infrastructurelinkages such as road, bulk water supplyandpowersupplytothePURAareawithindefinedtime-lines.

3. Key obligations of the Private Developer

Design,engineer,finance,procure,construct,rehabilitate/develop (as applicable) andsubsequentoperation&maintenanceoftheurbanamenitiesandadd-onfacilities.

Adherence to performance standards ofvarious services/facilities as per applicableCentral Government/State Governmentrules/laws. Further, the services providedbythePrivateDevelopershouldalignfullywiththeoverallobjectiveofPURAschemeentailing rural development and socialsustainability.

Undertakingnecessaryproceduralactivitiesrequired to obtain grants under variousMoRD and non-MoRD schemes availablefordevelopingtheurbanamenities/facilitiesproposedintheDPR.

Providing necessary information toIndependentEngineerandGramPanchayattoenablethemtoperformtheirfunctionsundertheagreement.

4. Key obligations of the Gram Panchayat(s)

Concurrence to thePrivateDeveloper asperagreedmilestones.

Handover/allow access to project site/facilitiestotheconcessionaire.

Provide all necessary clearances andapprovalsrequiredforimplementationoftheprojectinatimeboundmanner.

iii.

iv.

i.

ii.

iii.

iv.

i.

ii.

iii.


Support in provision of the core facilitiesrequired by the concessionaire forproviding the amenities/facilities to thedesired performance standards. Example:Bulk water supply, electricity, approachroadstothePanchayats,etc.

5. Key events of default by Concessionaire

Non-completion of the construction/development/rehabilitationactivitieswithinthestipulatedtimeframes.Non-achievement of any of the projectmilestoneswithinthestipulatedperiod.

iv.

i.

ii.

Failure to operate and maintain thefacilitiesasperthestandards,specifications,and the guidelines applicable in respectthereof.

Abandonmentofproject.

6. Termination due to Concessionaire event of default – Modes of recovery: The afore-mentioned events of default could lead to theterminationofthetwoAgreements.Insuchascenario,thegrantpaidbyMoRDtotheConcessionairewouldbe recovered either from the escrow account orthroughforfeitureoftheperformancesecurity.

iii.

iv.

Mission

Holistic and accelerated development of compact areas around a potential

growth centre in a Gram Panchayat (or a group of Gram Panchayats) through

Public Private Partnership (PPP) framework for providing livelihood

opportunities and urban amenities to improve the quality of life in rural areas.

Documents

A PUBLIC PRIVATE PARTNERSHIP (PPP) SCHEMEruraldiksha.nic.in/data/guidelines/PURA Guidelines in English.pdf · A PUBLIC PRIVATE PARTNERSHIP (PPP) SCHEME ... Salient Features of Request