The Indian Government’s Cabinet Committee on Economic Affairs (CCEA) has approved the setting up of the Public Private Partnership Appraisal Committee (PPPAC) which will appraise projects where the capital cost or the cost of underlying assets of the project exceeds USD 22 million. Once these projects are cleared by the Appraisal Committee, they would be put up to the Competent Authority for final approval. Any departures from the Model Concession Agreement (MCA) that are not material or substantive will be cleared by the PPPAC with the approval of Finance Minister. Where the departures are material or substantive, approval of the authority that approved the MCA would be necessary.

The process of approval of projects would, inter alia, be as follows:

1. The concerned Ministry would develop individual proposals using legal, financial and technical consultants and also ascertain the views of an inter-ministerial consultative group, if necessary. The proposal, as formulated by the Ministry, would be considered by the PPPAC for ‘in-principle’ clearance before inviting expressions of interest from prospective investors.
2. Following the ‘in principle’ clearance of the PPPAC, the concerned Ministry will invite expressions of interest and develop the documents further. Where necessary, inter-ministerial consultations and pre-bid conferences with bidders will also be held. The concession agreements thus finalized for the purpose of inviting financial bids would be cleared by the PPPAC before technical and financial bids are invited.
3. If the public private partnership project is based on a duly approved MCA, ‘in principle’ clearance by the PPPAC would not be necessary. In such cases, approval of the PPPAC would be obtained before inviting the technical and financial bids.