Monitoring mechanism to be set up for public-private partnership projects

NEW DELHI: With an aim of ensuring timely completion of projects undertaken in public-private partnership mode, the government today decided to set up an institutional mechanism to oversee contract performance effectively.

The Institutional Mechanism for Monitoring of PPP Projects, cleared by the Union Cabinet, will have two-tier system -- Projects Monitoring Unit (PMU) and Performance Review Unit (PRU).

The proposal of the Planning Commission was approved at a time when an increasing reliance is being placed on PPP projects across many wings of the government.

"It has become necessary to adopt a well-defined institutional structure for overseeing contract performance effectively," an official statement said.

"This is all the more necessary as concessionaires will have an incentive to cut corners whereas the criticism would be faced by the government," it added.

As per to the decision, the PMU will monitor the performance of PPP projects at the project authority level and the PRU at the ministry or state government level, as the case may be.

The PMU is to prepare a report to be submitted to the PRU within 15 days of the close of the relevant month.

The report is to cover compliance of conditions, adherence to time lines, assessment of performance, remedial measures, imposition of penalties, etc, the statement said.

The PRU is to review the reports submitted by the different PMUs and oversee or initiate action for rectifying any defaults or lapses.