Chapter VI PROJECT IDENTIFICATION & CONCESSIONAIRE SELECTION

1. (1) The Board shall be the nodal agency to coordinate all the efforts of the State Government in the identification and priortisation of infrastructure projects.
2. (2) The Board in consultation with the State Government shall scrutinize, evaluate and prioritise infrastructure projects to be developed, managed and operated in the State of Punjab.
3. (3) The Board shall inform the State Government of the infrastructure projects so identified. The State Government shall decide within a period of sixty30 days of the receipt of such information, as to whether and which of the infrastructure projects will be undertaken as State Government projects in a time bound manner.
4. (4) Where the State Government decides not to take up an infrastructure project out of its own funds or it fails to decide in this regard within the period as specified in sub-section 30 As omitted vide notification no.31-Leg./2003 dated 03.11.2003 31 As constituted vide notification no.7/1/11/2001/5.FE.4/7637 dated 16.09.2002 32 Substituted vide notification no.17-Leg./2017 dated 27.07.2017 (Punjab Act No.13 of 2017) (3), then such project shall automatically revert back to the Board. 33
5. (5) Upon receipt of the projects referred to in sub-section (4), the Board shall decide as to whether a public private partnership project, is to be executed completely on private participation basis and partly out of development fund or totally funding the same out of the development fund and thereafter the Board, in due consultation with the Project Management Team or the Sectoral Sub-Committee, as the case may be, shall,33
   • (i) publish the notice containing details of the infrastructure project, in the leading newspapers, inviting objections and suggestions;
   • (ii) assist the Authority in conducting public hearing on objections and suggestions received to finalize the scope of the infrastructure project;
   • (iii) notify infrastructure project inviting bids or placement of request for proposal;
   • (iv) conduct pre-bid processes;
   • (v) conduct evaluation of bids; and
   • (vi) conduct negotiations and recommend the grant of Concession by the Board.
6. (6) The Board, may take up any engineering, procurement, construction projects or such projects, which do not involve private participation and can be taken up by it out of the development fund or partly out of the development fund and partly from the funds made available by the State Government or any other source (including Centrally or State sponsored Schemes), as the case may be33
7. (7) The Board may assign the work of conceptualization, identification, execution and monitoring of any urban or rural infrastructure projects, to the district level Urban Infrastructure Committee or the Rural Infrastructure Committee, as the case may be, duly constituted by the State Government by notification in the Official Gazette34 35, from time to time. The Board, shall release the funds directly to the Deputy Commissioner concerned, for execution of such final projects so recommended by the said committees33 33 As substituted vide notification no. 39-Leg./2015 dated 09.12.2015 & notification no.26-Leg./2016 dated 04.07.2016 34 Vide notification no. S.O.59/P.A.8/2002/S.28/2015 dated 15.12.2015 35 Vide notification no. S.O.5/P.A.8/2002/S.28/2016 dated 02.02.2016

1. (1) Once the infrastructure project is referred back to the Board in terms of sub-section (4) of section 28, the Board shall provide wide publicity at national level to the proposed infrastructure project or projects, as the case may be, and propose its implementation as per the decided parameters and structures. For this purpose, the Board shall cause the notice of the proposed infrastructure project to be published in the specified manner in the leading local and national newspapers and in the Official Gazette of the State Government. Such public notice shall include highlights of the feasibility report. On demand, a complete copy of the feasibility report shall be made available from the office of the Board on payment of a specified fee.
2. (2) The notice shall:-
   • (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.
3. (3) The date, time and place of the proposed public hearing referred to above shall be included in the notice by the Board after consultation with the Authority.
4. (4) All persons including bona fide residents, Non-Governmental Organizations and others, located at the project sites of displacements likely to be affected by the proposed infrastructure project and other members of public, can participate in the public hearing before the Authority.

1. (1) The Authority shall take into account any objections or suggestions or comments of the concerned persons before approving the proposed infrastructure project, and may either approve the same in its original format or subject to any changes that may be proposed by the Board and found acceptable by the Authority.
2. (2) In the event, the Authority is of the opinion that the objections or suggestions or comments so raised in the hearing, are unfounded or baseless or that the same can be dealt with at a later stage, it may, in its discretion allow the Board or the public infrastructure agency to go ahead with the project. Such decision shall be taken within a period of thirty days of the hearing and it shall be final and binding. 30-A. Exemption from hearing36 Notwithstanding anything contained in this Act, no hearing shall be required to be given in respect of such projects which in the opinion of the Board, primarily involve upgradation of existing infrastructure project or structuring of management and operation of infrastructure project or have been identified and taken up for development by the Board or any public infrastructure agency prior to the issuance of the notification under subsection (1) of section 5: Provided that the State Government may for the reasons to be recorded in writing, exempt any other infrastructure project from giving hearing for facilitating expeditious implementation of such project in public interest. 30-AA.Exemption of certain projects from public hearing37

Feasibility Report

Upon identification of the infrastructure project to be developed under section 28, the Board shall direct the Project Management Team or the concerned Sectoral SubCommittee or Committees to carry out itself or through external service providers or consultants, a feasibility study and to prepare and submit a feasibility report within a period of six months.

1. (1) Upon finalisation of the scope and structure of the infrastructure project under section 30, the Board shall forthwith cause to be published35, in at least two national level newspapers out of which, one will be a financial or business newspaper; and in one local newspaper, which is circulated in the region, province, city or municipality in which the project is to be constructed, a notice inviting all interested parties to participate in a competitive public bidding for the infrastructure projects so approved. 36 As inserted vide notification no.31-Leg./2003 dated 03.11.2003 37 As inserted vide notification no.39-Leg./2015 dated 09.12.2015 & notification no.26-Leg./2016 dated 04.07.2016
2. (2) The Board shall be responsible in all respects for all aspects of pre-bidding and bidding processes, including, -
   • (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.
3. (3) The instructions to the bidders relating to the bidding shall be clear, comprehensive and fair and shall, as far as necessary and practicable, include the following information, namely:-
   • (i) general description and objectives of the infrastructure projects;
   • (ii) basic contractual arrangement under which the implementation of the infrastructure project 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 concessionaire38;
   • (viii) requirements of concerned regulatory bodies, if any;
   • (ix) monetary rules and regulations governing foreign exchange remittances, if 38 As substituted vide notification no.31-Leg./2003 dated 03.11.2003 relevant;
   • (x) revenue sharing arrangements, if any; and
   • (xi) expected commissioning date.
4. (4) Minimum design and performance standards or specifications including appropriate environmental standards shall be clearly defined and non-conformity with any of these minimum requirements shall render the bids as non-responsive.
5. (5) Financial parameters shall also be described, which amongst others, shall include,-
   • (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
     • (ix) taxes and duties.

1. (1) Any person, who fulfills the qualification criteria, may respond to the notice inviting tenders or proposals, subject to the prevalent laws and policies laid down by the Board. The expression ‘person’ shall include natural and juristic persons, as permissible by policies of the Board, whether of Indian or foreign origin.
2. (2) The prospective bidders will be required to prepare and submit their respective prequalification documents within the specified period.
3. (3) Amongst others, the following may be specified by the Board, as the pre-qualification requirements, namely;-
   • (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.
4. (4) On the basis of the pre-qualification proposal received, the Board shall mark the prequalification documents of each prospective proposer as either pre-qualified or predisqualified, as the case may be, within a specified period.

1. (1) The Board shall make available the related bid documents to all pre-qualified bidders within the specified period to prepare and submit their respective bids.
2. (2) The bids will be submitted in two envelopes i.e. the one containing the technical proposal and the other containing the financial proposal.
3. (3) The required bid security, if any, shall be valid for the specified period, but in no case it will exceed one hundred and twenty days following the opening of the bids, unless specifically decided by the Board for a particular infrastructure project.
4. (4) The evaluation of bids shall be undertaken in two stages in terms of the specified procedure and period.
5. (5) The first stage of evaluation shall involve the assessment of the technical proposal regarding technical, operational and environmental, viability of the proposal as contained in the bidder’s first envelopes vis-à-vis the specified requirements and criteria or minimum standards and the basic parameters specified in the bidding documents.
6. (6) Only those bidders, who have not been disqualified at the first stage of evaluation, shall be eligible to participate in the second stage of evaluation. The second stage of evaluation shall involve the assessment in comparison of the financial proposals of the qualified bidders based on the criteria and parameters specified by the Board in this behalf. Such criteria and parameters, in the case of infrastructure projects without private participation, may provide for clubbing of technical and financial scores for the purposes of determining the bidder eligible for award of work.
7. (7) In the case of infrastructure projects based on private participation schemes, the Board shall award the contract to the bidder whose proposed tolls or fees or rentals or charges or period of concession39 in respect of models of contracts (shortly indicated as BOT, BOO, CAO, DOT, ROT, ROO in Schedule II) and other similar schemes or proposed Schedule of amortization payments in respect of BT, BLT, BTO (as shortly indicated in Schedule II) and other similar schemes, are determined to have the lowest present value.

1. (1) The concession shall be granted by a public infrastructure agency to a bidder who:-
   • (i) satisfies the stipulated financial, technical, organizational and legal standards; and
   • (ii) whose bid is the lowest and is in most favorable terms for the project, based on the present value of its proposed tolls, fees, rentals, charges and period of concession39 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.
2. (2) The purpose of the financial package governing any sector or the concessions to be granted for any infrastructure project will be to ensure that the same is financially viable and bankable to attract maximum private investment. The public infrastructure agencies may have to make substantial investments or grant substantial concessions to make an infrastructure sector or an infrastructure project viable.
3. (3) Immediately after the40 completion of the second stage evaluation, a decision on whether or not to award the contract shall be taken by the Board.
4. (4) If the Board takes a decision to award the contract, the Board shall issue to the proposed awardee, the notice of award immediately after such decision40.
5. (5) The notice of award shall indicate, amongst others, the time within which the proposed awardee shall submit the specified performance security, proof of equity contribution and financing resources, and in the case of a joint venture or consortium, the agreement indicating that the members are jointly and severally responsible for the obligations of the Concessionaire under the contract. 39 As amended vide notification no.31-Leg./2003 dated 03.11.2003 40 As substituted vide notification no.31-Leg./2003 dated 03.11.2003
6. (6) The winning bidder shall be granted the concession for the development, operation and maintenance of the infrastructure project, including the right to collect the specified tolls, fees, rentals and charges.
7. (7) Withdrawal of any member of a joint venture bidder prior to the actual award or implementation of the infrastructure project, can be a ground for cancellation of the contract and forfeiture of that person’s bid security. The Board may, however, proceed with the award of the contract for the implementation of the infrastructure project, if it is of the opinion that the other members of the joint venture or consortium are still capable of carrying out the project or that they have provided a suitable and acceptable substitute with equal or better qualifications.
8. (8) The bid and the bid securities shall be kept valid till the process of selection of bidders and the grant of concession is completed. Once the concession is granted, the bid securities shall be returned to the unsuccessful bidders.
9. (9) In the event of refusal, inability or failure of the bidder with the lowest complying evaluated bid to make good his bid by entering into Concession Agreement with the State Government within the specified period, the State Government shall forfeit the bid security of such bidder. In such an event, the Board shall consider the next complying and qualified lowest evaluated bid for the award. If the same too fails to execute the Concession Agreement with the State Government, its bid security shall likewise be forfeited, and the Board shall consider the next complying and qualified lowest evaluated bid, and so on until a contract has been entered into. In case, the State Government is unable to execute the contract with any of the complying and qualified bidders due to the refusal of the latter, the project shall be subjected to re-bidding.
10. (10) When no bids are received, the bidding shall be declared a failure.

Negotiations of contracts

Negotiation may41 be resorted to when there is only one bidder complying with the stipulated pre-qualification conditions (hereinafter referred to as the “Complying Bidder”) as defined hereunder:-

1. (i) if after advertisement, only one concessionaire applied for pre-qualification and it meets the pre-qualification requirements;
2. (ii) if after advertisement, more than one concessionaire applied for pre- qualification, but only one meets the pre-qualification requirements;
3. (iii) if after pre qualification of more than one concessionaires, only one submits a bid; and 41 As amended vide notification no.31-Leg./2003 dated 03.11.2003
4. (iv) if after pre-qualification, more than one concessionaires submit bids, but only one is found by the Board to be Complying Bidder. Provided that, any of the aggrieved disqualified bidder may, within a period of fifteen days from the date of decision of the Board, file appeal to the Authority and the same shall be decided by the Authority within a period of twenty-one days from the date of filing of the appeal.

1. (1) When any person makes a representation to the Board with respect to any project, which has not yet been approved or notified in terms of the provisions of this Act, the same may be accepted by the Board on a provisional basis; if such a project involves a new concept or technology.
2. (2) On acceptance of the proposal by the Board, the Board may purchase the proposal from the proposer on payment of a sum mutually agreed between the proposer and the Board.
3. (3) The Board shall adopt the proposal as a basis for selecting a person with whom Concession Agreement may be entered into, and for selecting such person, the Board shall follow the procedure of public bidding as specified in this Act, in which the proposer may also participate.
4. (4) Where the proposal of the proposer, referred to in sub-section (2), is not preferable to the proposal of the selected person, the former shall be given an opportunity to make his proposal competitive with that of the selected person within a period of thirty days from the date on which he has been given opportunity and if the proposer referred to in subsection (2), fails to do so, the Board may execute the Concession Agreement with the selected person.

1. (1) If at any time after the pre-feasibility stage, the Board is of the prima-facie opinion that a proposed infrastructure project is unlikely to succeed through private participation, the Board may refer that infrastructure project to the State Government to get the same executed through special purpose vehicle or vehicles by leveraging the funds available with the Board or the public infrastructure agencies.
2. (2) In case of private participation in the special purpose vehicles, which are granted Concessions to implement the infrastructure projects referred to in sub-section (1) those special purpose vehicles will be governed by the relevant provisions of this Act, rules and regulations framed thereunder.

1. (1) Immediately after the issuance of the notice of award under sub-section (4) of section 3542 the public infrastructure agency shall execute a Concession Agreement with the awardee or successful bidder.
2. (2) Where the Board, having regard to the nature of an infrastructure project is satisfied that, it is necessary to do so, it may permit combination of two or more model contracts of the nature specified in Schedule II in to one agreement for the purpose of private participation in the development, operation and management of the infrastructure projects.