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PPP TOOLKIT for Improving PPP
Decision-Making Processes

Sector: State Highway  |  Module 2: Work through the PPP process

Readiness check 2 and application for in-principle approval

Process for in-principle clearance

The clearance process and the institutions that support this will vary between states and at the local municipality level, as well as by sector and size of project. An institutional arrangement is in place at Central level and some States (for example Assam, Orissa, Madhya Pradesh) have similar approaches.

However, other States have different arrangements and in some States and especially at the municipal level the procedures may not yet be developed. Project Officers should check the requirements that apply in their jurisdiction (for example by consulting the relevant PPP nodal agency, if one exists, or other the relevant institutions’ websites and guides. Links are provided in the links section.

For projects at the Centre, an application for clearance is submitted to the PPP Cell in DEA which passes it on for in-principle clearance by PPPAC, the Standing Finance Committee, Expenditure Finance Committee, or Administrative Ministry as required (the competent Authority for appraisal and clearance depends on the level of project cost). The process is detailed in DEA’s approval guidelines.

For Centre level projects DEA has provided pro-forma memoranda to accompany the pre-feasibility report in applications (see DEA Compendium of Approval Guidelines, 2008, Annexes). These include summary details such as project description, financing arrangements, IRR, other clearances etc.

For state-level projects, the committee or agency empowered to make in-principle clearance will depend on the particular institutional set-up of the state.

In some cases the PPP Cell may be empowered to give in-principle clearance without application to a competent authority. For example, at the Centre level the PPP Cell as secretariat to the PPPAC can give in-principle clearance for proposals submitted on the basis of Model Concession Agreements. (See DEA Guidelines)



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