PPP projects face increased accountability

In the previous issue of India Business Law Journal this column discussed the revised request for quotation norms for public-private partnership (PPP) projects, which was an attempt by the government of India to provide a more bidder-friendly environment for PPP projects, made in response to bidders’ concerns.

The government now wishes to make private sector participants financially accountable, and is taking steps to introduce checks and balances.

Public audit of public funds

PPP projects often receive what is referred to as viability gap funding, in which the government authority that invites bids makes public funds available for infrastructure projects which would otherwise be commercially unviable or have long gestation periods. This funding may constitute up to 40% of the project cost. As public funds are being used, the government, including the prime minister, believe that such projects should be audited by the leading authority appointed to audit public bodies, the Comptroller and Auditor General of India (CAG).

Akshay Jaitly is a partner at Trilegal in Delhi, where Rachika Sahay is a senior associate and Varun Nair is an associate. Trilegal is a full-service law firm with offices in Delhi, Mumbai, Bangalore and Hyderabad. The firm has over 120 lawyers, some of whom have experience with law firms in the US, the UK and Japan.