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The Punjab Infrastructure (Development & Regulation) Act, 2002

Punjab Act 8 of 2002

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Department of Legal and Legislative Affairs, Punjab

Chapter I

Preliminary

(1) "Authority" means the Punjab Infrastructure Regulatory Authority established under section 4;

(2) "Board" means the Punjab Infrastructure Development Board established under section 18;

(3) "bye-laws" means the by-laws made by the Board under section 24;

(4) "Chairperson" means the Chairperson of the Authority;

(5) "concession" includes any right or interest granted to a concessionaire in relation to any aspect of an infrastructure project, as well as any subsidy, subvention, grant or other similar financial incentive granted by the State Government to secure the viability and commercial efficacy of an infrastructure project;

(6) "concession agreement" means any of the contracts executed for the purposes of private participation in an infrastructure project between a concessionaire and a public infrastructure agency in terms of this Act, or the rules or regulations made thereunder as per the model specified in Schedule II;

(7) "concession fee" means the sum of money required to be paid by the concessionaire to a public infrastructure agency in consideration of grant of a concession for undertaking an infrastructure project pursuant to the provisions of this Act, rules or regulations made thereunder;

(8) "concessionaire" means a person, who is selected and awarded a concession for financing, development, maintenance or operation of an infrastructure project in terms of this Act or rules or regulations made thereunder ;

(9) "committee" means a Committee and includes a Sectoral Sub-Committee, Project Implementation Sub-Committee or any other Committee called by any other name, constituted by the Board under this Act for the purposes assigned to them ;

(10) "development" includes creation of new facilities, rehabilitation; improvement 'expansion', alteration and replacement of existing facilities;

(11) "Development Fund" means the Punjab Infrastructure Development Fund constituted under section 27;

(12) "disinvestment" means a sale of equity or shares held by the State Government or a public body to any person;

(13) "fee" means a charge levied and collected for facilitating the development, maintenance and providing of infrastructure facilities under this Act;

(14) "infrastructure project" means a project in any of the infrastructure sectors, which may involve development, maintenance or operation of infrastructure facilities through private participation or financial sources other than those provided by State Budget;

(15) "infrastructure sector" means an infrastructure sector specified in Schedule I and shall include such other sectors as may be notified by the State Government from time to time in this behalf;

(16) "milestone bonding" means a schedule or chart indicating the specified time within which a work is to be completed;

(17) "negotiated contract" means a contract entered into by the State Government in terms of section 36;

(18) "notification" means a notification published in the Official Gazette of the State of Punjab;

(19) "prescribed" means prescribed by the rules made under this Act;

(20) "private participation" means the participation in development, maintenance or operation of infrastructure projects by any person other than the State Government, public infrastructure agency or public body as may be permitted by the Board from time to time;

(21) "Project Management Team" means a team of [-] expert officials of the Board;

(22) "public body" means a body either established by State Government or working under the control of the State Government;

(23) "public infrastructure agency" means a Government Department, Government Company, Government-owned or controlled Corporation, Local Authority or a Public Body, which own, govern or control infrastructure sectors or infrastructure projects;

(24) "regulations "means the regulations made by the Authority under section 17;

(25) "rules" means the rules made by the State Government under section 46;

(26) "Schedule" means a schedule appended to this Act;

(27) "Schedule of amortisation" means a schedule of periodic payments of interest and principal owed on a debt obligation;

(28) "section" means a section of this Act;

(29) "sectoral policy" means a policy pertaining to an infrastructure sector;

(30) "service provider" means any agency or body other than those constituted under the Act, which provides services to the Board;

(31) "special purpose vehicle" means any body or authority, consisting of experts in the relevant fields as may be constituted by the Board to execute an infrastructure project;

(32) "State Government" means the Government of the State of Punjab in the Department of Finance;

(33) "tariff" means a toll or charge or fee, other than the fee levied under clause (13) of section 2 and section 25, payable by the users of an infrastructure project;

(34) "unsolicited proposal" means a proposal for the development, maintenance or operation of an infrastructure project received from any person without any invitation or a proposal initiated, by the State Government or the Board in terms of section 37 ; and

(35) "Vice-Chairperson" means the Vice-Chairperson of the Authority.

Chapter II

Private Participation in the Infrastructure Projects

Chapter III

Punjab Infrastructure Regulatory Authority

(i) Qualifications and experience in the field of management of infrastructure sector or infrastructure project :- Relevant professional qualifications and a minimum experience of ten years of working after acquiring the said qualifications in a Government department or public sector organisation or in a private sector organisation; having annual turnover of one hundred crore rupees or more in any infrastructure sector in respect of conceptualizing, appraisal, development, financing or implementation of infrastructure projects;

(ii) Qualifications and experience in the field of Law. - A serving or a retired District and Sessions Judge or a person qualified to be a District and Sessions Judge;

(iii) Qualifications and experience in the field of Finance, Economics or Commerce :-

(a) Membership of the Institute of Chartered Accountants of India ; or

(b) Post Graduation in Economics, Commerce, Management or Engineering.

(a) Ten years' experience of working after acquiring the said qualifications in a Government department or public sector;

(b) Ten years' teaching experience in a university or a college, recognised by the University Grants Commission or an institute recognised by the All India Council of Technical Education.

(i) relinquish his office by giving a written notice of at least three calendar months to the State Government ; or

(ii) be removed from his office in accordance with the provisions of Section 8.

(i) shall be ineligible for further employment under the State Government; and

(ii) shall not accept any commercial employment in any infrastructure sector organisation, associated with the Government of the State of Punjab during his term in office, for a period of two years from the date he ceases to hold such office.

(i) been adjudged insolvent ; or

(ii) been convicted of an offence which, in the opinion of the State Government, involves moral turpitude; or

(iii) become physically or mentally incapable ; or

(iv) acquired such financial or other interest as is likely to affect prejudicially his functions in any of the said capacities ; or

(v) so abused his position as to render his continuance in office prejudicial to the public interest.

(i) a reference is made by the State Government to the Chief Justice of the High Court of Punjab and Haryana seeking an enquiry and recommendation on the proposed removal of the Chairperson or Vice-Chairperson or member along with the grounds for the removal and material supporting such proposal;

(ii) the reference is duly enquired into by an inquiry committee headed by a sitting or retired High Court Judge or any other person appointed by the Chief Justice of the High Court of Punjab and Haryana; and

(iii) the inquiry committee makes recommendation that the Chairperson or Vice-Chairperson or member ought to be removed on such ground or grounds.

(i) any vacancy in, or any defect in the constitution of the Authority; or

(ii) any defect in the appointment of a person acting as a member of the Authority; or

(iii) any irregularity in the procedure of the Authority not affecting the merits of the case.

(i) contribution received from the State Government;

(ii) grants received by the Authority; and

(iii) any other sum received by the Authority from any sources including fixed by the Authority under the regulations for the proceedings before the Authority.

(i) to aid and advise the State Government in the formulation of appropriate policy or guidelines relating to tarif;

(ii) to conduct the public hearing regarding the approval of proposed infrastructure projects in terms of section 30

(iii) to determine, modify or vary the tariff on the basis of the concessions granted to the concessionaires and the interest of the consumer ;

(iv) to regulate the working of the concessionaire and promote efficient, economical and equitable performance, including laying down standards of performance of the concessionaire in regard to the service to the consumer;

(v) to adjudicate upon appeal preferred to it against an order passed by the Board or the State Government related to the approval of an infrastructure project or the award of a concession ; and

(vi) to adjudicate upon disputes inter se two or more Concessionaires, operators of infrastructure projects, the State Government and the Board:

(i) summoning and enforcing the attendance of any person and examining him on oath;

(ii) requiring the discovery and production of documents

(iii) receiving evidence on affidavits ;

(iv) issuing commissions for the examination of witnesses or documents;

(v) reviewing its decisions ;

(vi) dismissing an application for default or deciding it ex parte, setting aside any order of dismissal or any application for default or any order passed by it ex parte; and

(vii)any other matters as the Authority may specify by regulations.

(i) Specifying procedure to transact business in the meeting under section 9 ;

(ii) Determining of salaries, allowances and other conditions of service of the officers and other employees of the Authority under sub-section (2) of section 11 ; and

(iii) Fixing of sums received by the Authority under clause (iii) of sub-section (1) of section 12.

Chapter IV

Punjab Infrastructure Development Board

(a) The Chief Secretary to Government of Punjab,

(b) The Principal Secretary to Government of Punjab, Department of Finance,

(c) Principal Secretary to the Chief Minister of Punjab,

(d) Managing Director of the Board - Convenor, and

(e) Any one other [person] to be nominated by the Board.

(i) any vacancy in, or any defect in the Constitution of the Board ; or

[(ii) any defect in the appointment of a person acting as a Chairman or Vice-Chairman or Member of the Board; or].

(iii) any irregularity in the procedure of the Board not affecting the merits of the case.

(i) act as a nodal agency to co-ordinate all efforts of the State Government regarding the development of the infrastructure sectors, involving private participation and funding from sources other than those provided by State budget and will, -

(a) identify infra structure projects for [private participation];

(b) promote competitiveness and progressively involve private participation while ensuring fair deal to the consumers;

(c) identify bottlenecks in the infrastructure sectors and recommend to the State Government, policy initiatives to rectify the same;

(d) select, prioritise and determine sequencing of infrastructure projects;

(e) formulate clear and transparent policies related to the infrastructure sectors so as to ensure that project risks are clearly identified and allocated between the state holders; and

(f) identify the sectoral concessions to be offered to concessionaires to attract private participation and secure availability of viable infrastructure facilities to the consumers;

(ii) prepare internally or through external consultants or service providers engaged for the purpose, all necessary documents including the bid or tender documents, draft contracts including the various contractual arrangements and incentives to be offered by the State Government ;

(iii) create a Fund to be known as Punjab Infrastructure Initiative Fund, which shall vest in the Board to carry out the pre-feasibility and feasibility studies and the preparing of reports for the proposed infrastructure projects, alongwith the collection of the relevant data. The Punjab Infrastructure Initiative Fund will have contributions from the Development Fund, budgetary resources of State Government, public bodies and multilateral lending agencies and financial institutions;

(iv) assist public infrastructure agencies and concessionaires in obtaining statutory and other approvals;

(v) recommend the grant of concessions to a public infrastructure agency in accordance with the provisions of this Act, the rules and the regulations made thereunder ;

(vi) assist in determining the level and structuring of investments of the State Government and public bodies into infrastructure projects with private participation including holding the investment or part thereof ;

(vii) create special purpose vehicles for implementing infrastructure projects in terms of section 38 in coordination with the State Government or public infrastructure agencies ; and

(viii) manage and administer the Development Fund and the Punjab Infrastructure Initiative Fund.

(i) acquire, hold, develop or construct such property, both movable and immovable, as the Board may deem necessary for the performance of any of its activities related to the development of infrastructure sectors or infrastructure projects ;

(ii) advise or recommend to the State Government acquisition of land under the Land Acquisition Act, 1894 for the purposes of infrastructure projects;

(iii) lease, sell, exchange, or otherwise make allotments of the property referred to in clause (i) to concessionaire and to modify or rescind allotments, including the right and power to evict the allottees concerned on breach of any of the terms or conditions of such allotment;

(iv) borrow and raise money in such manner as the Board may think fit and to secure the repayment of any money borrowed, raised or owing by mortgage, charge, standard security, lien or other security upon the whole or any part of the Board's property or assets (whether present or future), and also by a similar mortgage, charge, standard security, lien or security to secure and guarantee the performance by the Board of any obligation or liability, it may have undertaken or which may become binding on it;

(v) constitute a Project Management Team and one or more Advisory Committee or Committees or Sectoral Sub-Committee or Project Implementation Sub-Committee, or engage suitable service providers or advisors or consultants to advise the Board for the efficient discharge of its functions;

(vi) enter into and perform all such contracts as it may think necessary or expedient for performing any of its functions; and

(vii) do such other things and perform such other acts as it may think necessary or expedient for the proper conduct of its functions and for carrying into effect the purposes of this Act.

(a) the formulation, review, change and implementation of the sectoral policies for private participation in the infrastructure sector;

(b) the conduct of feasibility study and preparation of feasibility report; and

(c) formulating the sectoral packages of financial incentives and concessions.

(a) providing proposals to the [Board or any other Committee as may be specified in this behalf by the Board] for taking decision on project identification and priority,

(b) finalising the scope and structuring of infrastructure projects,

(c) pre-bidding and bidding procedures,

(d) selection of concessionaire and recommending grant of concession, and

(e) implementing, supervising and monitoring of projects.

(i) the constitution, functioning and powers of the Secotral Sub- Committee, Project Implementation Sub-Committee under sub-section (3) of Section 21;

(ii) the custody, application and operation of the Development Fund including, borrowing and investment under sub-section (3) of section 22;

(iii) the duties of the Managing Director, officers and employees of the Board and their conditions of service under section 23;

(iv) conduct of the meetings of the Board, the time and place at which such meetings shall be held, the procedure to be followed in the transaction of business under sub-section (7) of section 18; and

(v) any other matters in relation to which bye-laws are required to be or may be made.

Chapter V

Levy of Fee and Punjab Infrastructure Development Fund

Chapter VI

Project Identification and Concessionaire Selection

(i) publication of the notice containing details pertaining to the infrastructure projects in the leading newspapers, inviting objections and suggestions;

(ii) assisting the Authority in conducting public hearing on objections and suggestions received to finalise the scope of the infrastructure project

(iii) notification of infrastructure project inviting bids or placement of request for proposal;

(iv) conducting pre-bid processes;

(v) conducting evaluation of bids; and

(vi) conducting negotiations and recommending the grant of concession by the Board.

(i) highlight the salient features of the proposed infrastructure project, its parameters or structuring

(ii) invite objections and suggestions from the public to the proposed infrastructure project and its parameters in respect of which objections should be filed with the Board within the period specified in the notice from the date of publication of the notification ; and

(iii) mention the date, time and place of the proposed public hearing to consider such objections, suggestions or comments.

(i) fixing pre-qualification criteria on the basis of the clearly identifiable parameters known to the Concessionaires, Contractors and the General Public;

(ii) arranging pre-bid conferences and bid evaluation conferences with the prospective Concessionaires or Contractors;

(iii) issuing clear, comprehensive and fair instructions to bidders, which establish the rules of bidding and shall include all relevant information;

(iv) preparing the bid or tender documents, which shall include the following, namely-.-

(a) instructions to bidders;

(b) pre-qualification or qualification parameters, both technical (indicating experience, specific norms, design and performance standards) and financial;

(c) draft concession agreement or any other appropriate agreement, clearly defining the basic relationship between the parties with their inter se rights and responsibilities;

(d) bid form; and

(e) any other documents, deemed necessary

(i) general description and objectives of the infrastructure projects;

(ii) basic contractual arrangement under which the implementation of the infrastructure protect shall be undertaken;

(iii) bid submission, procedures and requirements;

(iv) bid and bid security validity period;

(v) milestone bonding ;

(vi) method and criteria (including the minimum amount of equity) for the valuation of the technical and financial components of the Bids

[(vii) tariff policy, formula and factors to be used for the charge, recovery and appropriation of tolls or fees or rentals by the concessionaire.]

(viii) requirements of concerned regulatory bodies, if any;

(ix) monetary rules and regulations governing foreign exchange remittances, if relevant;

(x) revenue sharing arrangements, if any ; and

(xi) expected commissioning date.

(a) maximum period of project construction;

(b) fixed term for project operation and collection of tolls or fees or rentals or charges in respect of models of contracts specified in Schedule II;

(c) The Draft Concession Agreement shall clearly define the basic and legal relationship between the parties as well as the rights and responsibilities of the parties involved. Where applicable, the following matters, among others, shall be included :-

(i) bonds, guarantees, insurance, damages;

(ii) warranties, indemnities, limitation of liability;

(iii) schedule and amount of milestone bonding;

(iv) relevant price index to be used;

(v) force majeure and its consequences;

(vi) effect of changes in circumstances, which may be brought about by, among others, the enactment of new laws or regulations or the change-in existing government policies which will materially affect the financial viability of the project;

(vii) contract termination and combination;

(viii) the governing laws, manner and procedure for the resolution of disputes including partnering, conciliation, arbitration;

(ix) project monitoring mechanisms including provisions for independent quality control consultants and dispute review experts on a standing basis; and

(x) taxes and duties.

(i) legal requirements;

(ii) technical qualifications i.e. the Concessionaire applicant must possess adequate relevant experience in terms of specified requirements for the infrastructure project or sector in question. The applicant should not have committed a material breach in any previous Concession Agreement; and

(iii) financial qualification i.e. the Concessionaire must show the capability to sustain the financing requirements of the infrastructure project, which may be measured in terms of proof of the ability of the Concessionaire or to provide a minimum amount of equity to the project and letter of good standing from the bank.

(i) satisfies the stipulated financial, technical, organizational and legal standards; and

(ii) whose bid is the lowest and is in most favourable terms for the project based on the present value of its proposed tolls, fees, [rentals, charges and period of concession] over a fixed term for the infrastructure project to be constructed, rehabilitated, operated and maintained as per the stipulated minimum design and performance standards, plans and specifications.

(i) if after advertisement, only one concessionaire applied for pre- qualification and it meets the pre-qualification requirements;

(ii) if after advertisement, more than one concessionaire applied for pre-qualification, but only one meets the pre-qualification requirements;

(iii) if after pre-qualification of more than one concessionaire, only one submits a bid; and

(iv) if after pre-qualification, more than one concessionaire submit bids, but only one is found by the Board to be Complying Bidder:

Chapter VII

Project Implementation

Chapter VIII

Appeal and Other Miscellaneous Provisions

(a) "company" means any body corporate and includes a firm, or other association of individuals; and

(b) "director", relation to a firm, means a partner in the firm.

(i) prescribing the salary and allowances payable to, and the other terms and conditions of service of the Chairperson, Vice-Chairperson and other members under sub-section (5) of section 7; (ii) prescribing the form and place for preparing the annual report sub-section (1) of section 13;

(iii) prescribing the form and manner of furnishing returns, statements and particulars under sub-section (2) of section 13;

(iv) prescribing the manner for assessing, re-assessing, collecting and enforcing payment of fee under sub-section (3) of section 25; and

(v) prescribing the manner for maintaining the accounts and submitting the returns under sub-section. (4) of section 25.

(a) the previous operation of the Act so repealed or any rules or regulations made thereunder or anything duly done or suffered thereunder; or

(b) any obligation or liability accrued or incurred under the Act so repealed or any rules or regulations made thereunder.

Schedule I

Infrastructure Sectors

(See section 2 (15)]