DRDA's_20role_20in_20PU20projects202022032011.pdf

GOVERNMENT OF INDIA

MINISTRY OF RURAL DEVELOPMENT

Draft document on role of District Rural Development Agencies

(DRDAs)

under

Provision of Urban Amenities in Rural Areas (PURA) Scheme

Role of DRDA in PURA projects

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Table of Contents

1. Introduction.........................................................................................................................4

1.1. Background .................................................................................................................4

1.2. Process for implementation of the PURA scheme ........................................................5

1.3. Developer selection process and current status of the project .......................................7

2. Transaction structure and project agreements.....................................................................10

2.1. Transaction structure..................................................................................................10

2.2. Concession Agreement ..............................................................................................10

2.2.1. Key obligations of Concessionaire .....................................................................12

2.2.2. Key obligations of the Gram Panchayat..............................................................13

2.3. State Support Agreement ...........................................................................................13

2.3.1. Key obligations of the MoRD ............................................................................13

2.3.2. Key obligations of the concerned State Government ..........................................14

2.3.3. Key obligation of the Concessionaire .................................................................14

3. Obligations of District Rural Development Agency (DRDA).............................................16

3.1. Creation of a dedicated bank account for each PURA project.....................................16

3.2. Procurement and release of Scheme Funds.................................................................16

3.2.1. Procurement of Scheme Funds ...........................................................................17

3.2.2. Release of the Scheme Funds .............................................................................17

3.3. Procurement and release of PURA Grant ...................................................................18

3.3.1. Procurement of PURA Grant..............................................................................18

3.3.2. Release of the PURA Grant................................................................................18

3.4. Maintaining custody of the Performance Security ......................................................19

3.4.1. Build-up schedule of Performance Security........................................................19

3.4.2. Release schedule of Performance Security .........................................................19

3.4.3. Appropriation of the Performance Security ........................................................20

3.5. Role in the Dispute Resolution Process ......................................................................20


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List of Figures

Figure 1-1: Scoring methodology ................................................................................................8

Figure 1-2: Qualified PURA projects for which DPRs have been received ..................................9

Figure 2-1: Transaction structure...............................................................................................10

Figure 2-2: Overview of the Concession Agreement..................................................................11


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1. Introduction

1.1. Background

Lack of livelihood opportunities, modern amenities and services for decent living in rural areas

results in a sense of deprivation and dissatisfaction amongst a large percentage of population and

leads to migration of people to urban areas. This is primarily due to the wide gaps in the

availability of physical and social infrastructure between rural and urban areas. In order to

address these issues, the Government, in the past has launched various schemes at different

points of time. However, due to several reasons the impact has not been very visible. The

deliveries of these schemes were not simultaneous and although huge sums were earmarked for

capital expenditure, very little resources were spent on the operation and maintenance of the

assets. Also, each of these schemes operated autonomously and the standards set for

infrastructure services delivery in the rural areas was far below those for the urban population.

Hence, inspite of several schemes, there continued to be a substantial flow of migration from the

rural to urban areas. In order to catalyze the convergence between different infrastructure

schemes and create a new model for management of urban services in the rural areas, the

Provision for Urban Amenities in Rural Areas ("PURA") scheme has been developed.

The mission of the PURA scheme is holistic and accelerated development of compact areas

around a potential growth centre in a Gram Panchayat (or cluster of contiguous Gram

Panchayats) through Public Private Partnership ("PPP") framework for providing urban

amenities and livelihood opportunities to improve the quality of life in rural areas. The scheme

aims to provide urban amenities and livelihood opportunities in rural areas to bridge the rural-

urban divide.

This aim of the PURA scheme is proposed to be achieved under the framework of PPP between

Gram Panchayats and private sector partner. Core funding shall be sourced from the convergence

of Central Government schemes and complemented by additional support through the PURA

scheme. The private sector shall also bring on board its share of investment besides operational

expertise. The PURA scheme would be implemented and managed by the private sector on

considerations of economic viability but designed in a manner whereby it is fully aligned with

the overall objective of rural development. To attract the private sector, the scheme has a

“project based” design with well defined risks, identified measures for risk mitigation and risks

sharing among the sponsoring authority (Gram Panchayat), Government, State Government and

the Selected Bidder.


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1.2. Process for implementation of the PURA scheme

The Concessionaire selected to undertake PURA projects shall identify a Gram Panchayat/a

cluster of geographically contiguous Gram Panchayats for a population of about 25,000 (twenty

five thousand)–40,000 (forty thousand). Whereas, the cluster would be the project area, there

may be sub-projects to cover each of the Panchayats within the cluster. Alternatively, a large

single Panchayat could individually provide critical mass to make the project viable. The

coverage of the mandatory services should span across all the Gram Panchayats in a proposed

cluster. The Concessionaire is given the flexibility to identify and select the Gram Panchayat(s)

for undertaking PURA projects based on their familiarity with the area or past experience of

working at the grassroots level. In this identified PURA area, the Concessionaire shall plan for

the development/re-development of selected infrastructure services along with economic

activities, after undertaking baseline studies.

Identified Infrastructure and Urban Amenities: A list of infrastructure, urban amenities and

economic activities to be provided under PURA are as follows:

Mandatory - under MoRD

schemes or through self financing

Under Non-MoRD schemes

as local conditions permit (Illustrative list)

Add-on Economic

projects to generate

economic and livelihood

opportunities* (Illustrative list)

• Water and sewerage

• Village streets

• Drainage

• Solid waste management

• Skill development#

• Development of

economic activities#

• Solar village street

lighting

• Telecom

• Non conventional

electricity generation,

etc.

• Village linked tourism

• Integrated Rural Hub,

Rural Market

• Agri – common service

centre and warehousing

• Any other rural

economy based project

* At least 1 (one) such activity would be included in the project

# An activity from the list of Add-on Economic projects could be included in the activities

undertaken hereunder


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Amenities under Ministry of Rural Development (MoRD) Schemes: The Concessionaire shall be

responsible for delivering amenities and services such as water and sewerage, construction and

maintenance of village streets, drainage, solid waste management and skill development under

the following ongoing schemes of the MoRD: Special Projects for Skill Development of Rural

Youths under Swarnjayanti Gram Swarozgar Yojana (SGSY), National Rural Drinking Water

Programme (NRDWP), Total Sanitation Campaign (TSC), etc. For development of economic

activities, support may also be drawn from the National Rural Livelihood Mission (Restructured

SGSY).

Amenities under Non-MoRD Schemes: The PURA may include schemes of other central

government ministries and state government ministries, that are available “on tap” as some areas

of critical infrastructure (urban amenities) necessary for the project are not within the purview of

the MoRD, such as Ministry of Panchayati Raj (Rural Business Hub scheme and others),

Ministry of New and Renewable Energy (for solar village street lighting and non conventional

electricity generation) and Ministry of Communications and Information Technology (for

telecom services) etc. The Concessionaire shall access the support under such schemes of

relevant Ministries other than MoRD and dovetail into PURA for delivering the identified urban

amenities.

Add-on Economic Projects: It is necessary that the Concessionaire creates a pipeline of

commercially viable and people centric projects in the nature of add-ons to the list of urban

amenities to be provided. It is mandatory that the Concessionaire undertakes at least 1 (one) such

Add-on Economic activity in the proposed project. The Concessionaire has to ensure that the

minimum size of such Add on Economic Facility or Funded Add on Economic Facility shall be

atleast 5% (five percent) of the capital component of project cost or Rs. 1 (one) crore, whichever

is greater (land cost is not included). However, the Concessionaire has the choice of undertaking

more than 1 (one) such activity. In the event a Concessionaire wishes to undertake more than 1

(one) Add on Economic activity or Funded Add on Economic activity, then the Concessionaire

has to ensure that the total cost of Add on Economic Facilities and Funded Add on Economic

Facilities shall not exceed 35% (thirty five percent) of the capital component of the project cost

(land cost is not included). To ensure delivery of all elements of the project, add-ons submitted

as part of the Detailed Project Report (DPR) shall become ‘essential’/‘mandatory’. Such add-ons

will generate economic and livelihood opportunities and are preferably developed in partnership

with the Gram Panchayat and may inter-alia include:


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• Village tourism projects – that provide direct employment to locals and opportunities for

incomes to local artisans, performing artists, etc

• Setting up good skill development institution – this would link up with the economic activity

initiated in the project

• Integrated rural business centres – that will help the local economy to upgrade to commercial

scale

Each Project should have at least one such activity included in the project. In the event any

funding from any Government Instrumentality has been sought by the Concessionaire for any

Add-on Economic activity, then such activity shall be regarded as Funded Add-on Economic

Facility.

1.3. Developer selection process and current status of the project

Ministry of Rural Development (MoRD) has adopted a two-stage process for selecting Bidders

for the award of the Project. The first stage (the “Qualification Stage”) of the process involved

qualification of interested parties in accordance with the provisions of the Expression of Interest

issued by MoRD. MoRD issued the EOI on 15th April 2010, for which it received 93 responses.

MoRD, based on the evaluation of the EOIs, short-listed 45 bidders (Short-listed Bidders) for the

RFP stage.

In RFP stage of the bidding process, the short-listed Bidders were evaluated on the basis of their

technical capability in terms of infrastructure experience and community oriented project

experience and assigned scores as per the evaluation methodology in the RFP. The short-listed

Bidders were required to submit a concept plan detailing the components as envisaged under the

PURA scheme and in line with the philosophy of the PURA scheme. The concept plan received

from various Bidders were evaluated by a project screening and monitoring committee

established by MoRD and scored and ranked as per the criteria set out in the RFP.

The Bidders would then be ranked on the basis of their total score i.e. experience score and

concept plan score and the highest rank Bidders would be issued the Letter of Intent. The

following figure depicts the scoring methodology adopted by MoRD.


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Figure 1-1: Scoring methodology

ExperienceExperience

Total ScoreTotal Score

400400

10001000

200200

600600

InfrastructureInfrastructure

84 (83.5)84 (83.5)

Min experience >= Rs. 50 crores

Min experience >= Rs. 50 crores

400400

For experience >= Rs. 240 crores

For experience >= Rs. 240 crores

4040

Min experience >= 1 project

Min experience >= 1 project

200200

For experience >= 5 projects

For experience >= 5 projects

Concept PlanConcept Plan

400400

100100

Uniqueness & Quality of Concept

Uniqueness & Quality of Concept

5050

Coverage of Mandatory Services

Coverage of Mandatory Services

5050

Impact on local livelihood

Impact on local livelihood

100100

SustainabilitySustainability

100100

Coverage of Non MoRD Schemes

Coverage of Non MoRD Schemes

Community

Oriented

Community

Oriented

� Bidder/ Lead Member to meet minimum financial capacity (Net worth) of Rs. 25 crores.

� Bidder needs to achieve minimum 50% (200 points) for his concept

� Bidder/ Lead Member to meet minimum financial capacity (Net worth) of Rs. 25 crores.

� Bidder needs to achieve minimum 50% (200 points) for his concept

In response to the final RFP documents, nine bidders responded by submitting 14 bids. On the

evaluation of the bids, MoRD qualified 11 bids who met the eligibility requirements of the RFP

document. MoRD issued the Letter of Intent to the qualified bidders and asked them to prepare

the Detailed Project Reports for their respective PURA projects.

The Detailed Project Reports (DPRs) for eight PURA projects have been submitted by the

qualified bidders to the MoRD. MoRD is currently undertaking the evaluation of the DPRs

submitted by the qualified bidders. The results of the evaluation will be presented to the Inter

Ministerial Empowered Committee (EC) constituted for the project. MoRD shall issue a Letter of

Award to the only those projects, whose DPRs have been approved by the EC. Post the issue of

the Letter of Award, the Concession and State Support Agreements shall be executed. The

following figure depicts the qualified PURA projects for which the DPRs have been received by

MoRD.


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Figure 1-2: Qualified PURA projects for which DPRs have been received

Andhra

Pradesh

Puducherry

Map for representation only

Rajasthan

Kerala

Uttarakhand

7 68

Malappuram

Thrissur

4Warangal

Krishna 5

2

3Rajasmand

Jaipur

1Dehradun


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2. Transaction structure and project agreements

2.1. Transaction structure

There exist two main relationships in the project, viz (1) Relationship between Gram Panchayat,

District Rural Development Agency (DRDA) and Project SPV for the development of the PURA

Project; and (2) Relationship between Ministry of Rural Development (MoRD), the State

Government and the Project SPV. The following figure depicts these relationships:

Figure 2-1: Transaction structure

SPVGram

Panchayat(s)MoRD

State

Govt.

Private

Developer(selected by MoRD)

Access, Land, Core facilities,

Clearances /approvals

Release of State govt. share in funds under MoRD & non-

MoRD schemes through DRDA

Equity

State Support

Agreement

PURA Grant

Release of MoRD share under MoRD schemes

Amenities

and Add-on projects

Concession Agreement

Through

DRDA

Facilitate release of GOI share in funds

sanctioned under non- MoRD schemes

DRDA

Set-up and operate

a dedicated bank for each PURA project

These relationships are governed by the Concession Agreement and the State Support Agreement

respectively and shall be operational for a concession period of 13 years.

2.2. Concession Agreement

The Concession Agreement shall be executed between the Gram Panchayat(s), the

Concessionaire and the District Rural Development Agency (DRDA). The overview of the

Concession Agreement is presented in the figure below.


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Figure 2-2: Overview of the Concession Agreement

Appointed Date

3 years

Scheduled Project

Completion Date

Commercial Operations

DateProject Completion Certificate

Effective Date

Fulfillment of Conditions Precedent

180 days

Construction Period Operations Period

Signing of agreement

Expiry of the

Agreement

Concession Period

10 years

As highlighted in the above figure, out of the total concession period of 13 years, three years

have been allocated for development of the project facilities and 10 years for operating and

maintaining the same. The Concessionaire under this Agreement shall be granted to oblige or

entitle to:

1. Access and license to Site A (for executing its obligations relating to MoRD and non MoRD

schemes);

2. Develop, design, engineer, finance, procure, operate and maintain the Project facilities;

3. Right to collect user charges for facilities under MoRD schemes and non MoRD schemes at

such prevailing rates sanctioned by Gram Panchayat and/or state government;

4. Right to decide the rate, charge and collect user charges for add on facilities;

5. Right to lease/sub-lease the add on facilities;

6. Purchase or acquire on lease, on its own cost, land for Site B for add on facilities;

7. Not to use the land for any other purpose other than the purpose specified in the Agreement;

and

8. No right to mortgage Site A, facilities under MoRD and non-MoRD schemes.

The following paragraphs highlight the obligations of the parties to the Concession Agreement,

except the obligations of DRDA, which are detailed in the subsequent section.


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2.2.1. Key obligations of Concessionaire

The key obligations of the Concessionaire are as follows:

1. Design, engineer, finance, procure, construct, develop, operate and maintain the

Project facilities;

2. Utilize the PURA grant and scheme funds received for the purpose of this Project

only;

3. Submission of Performance Security;

4. Completion of the Project facilities as per the project milestones in the approved

DPR;

a. Damages applicable if project is delayed beyond Scheduled Project

Completion Date (SPCD);

b. Delay beyond 180 days from SPCD, Gram Panchayat has the right to

terminate the agreement.

5. Ensure commitment of other members [not less than 11% of the equity stake] whose

technical capacity has been evaluated during RFP stage till 2 years from Effective

Date;

6. Operation and Maintenance obligations:

a. Provide services to users, as per the service standards and operations and

maintenance manual, on a non-discriminatory basis to all users irrespective of

caste, community and creed;

b. Operate and maintain the Project facilities as per the approved DPR and

standards and specifications;

c. Collect and appropriate user charges for add on facilities;

d. Collect and appropriate the user charges for facilities under MoRD and non-

MoRD schemes as per prevailing norms and practices of the Gram Panchayat

and State Government;


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e. Comply with complaint handling procedure approved by the Gram Panchayat;

and

f. Adhere to documentation requirements under each scheme and provide

necessary reports to respective authorities.

2.2.2. Key obligations of the Gram Panchayat

The key obligations of the Gram Panchayat are as follows:

1. Facilitate in the procurement of applicable permits;

2. Assist the Concessionaire in obtaining access to necessary infrastructure facilities and

utilities;

3. Permit the peaceful use of Site A for mandatory facilities; and

4. Grant approvals on the work completed by the Concessionaire, to enable release of

the scheme funds and the PURA grant.

2.3. State Support Agreement

The State Support Agreement shall be executed between the Ministry of Rural Development

(MoRD), the concerned State Government and the Concessionaire. The key obligations of each

are highlighted below.

2.3.1. Key obligations of the MoRD

The key obligations of MoRD under the State Support Agreement are as follows:

1. Release the sanctioned installment of the PURA grant to the dedicated bank account

operated by DRDA as per the schedule;

2. Release the sanctioned installment of the scheme funds [share of MoRD only] to the

dedicated bank account operated by DRDA as per the schedule;

3. To ensure that Scheme Funds are provided even in the event of expiry of the scheme

before the achievement of Commercial Operations Date;

4. Authorize DRDA to receive and release the share of the ministries in the non-MoRD

schemes applicable to the Project.


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2.3.2. Key obligations of the concerned State Government

The key obligations of the State Government under the State Support Agreement are as

follows:

1. Enable access for the Concessionaire to Site A (For MoRD and Non MoRD

facilities);

2. Provide Applicable Permits to the extent the State Government is entitled to issue in

respect of facilities under MoRD and Non-MoRD schemes;

3. Facilitate the Concessionaire, on best effort basis, in procuring Applicable Permits

from any other Government Instrumentality;

4. Assist the Concessionaire in obtaining access to infrastructure facilities and utilities;

5. Release the share of the State Government funds related to schemes of MoRD and

non-MoRD facilities governed by the State Government to the dedicated bank

account on receipt of request from DRDA;

6. Ensure timely release of Scheme Funds and PURA Grant by DRDA after certification

from the Independent Engineer and concurrence of the Gram Panchayat;

7. Scheme Funds to be provided even in the event of expiry of the scheme before the

achievement of Commercial Operations Date;

8. Facilitate obtaining necessary approvals from concerned authorities for the Project;

9. Extend the necessary assistance to the Gram Panchayat for discharging its obligations

under the Concession Agreement;

10. Nominate a government official from any Government Instrumentality, under its

control, to act a single point of contact for the Concessionaire.

2.3.3. Key obligation of the Concessionaire

The key obligations of the Concessionaire under the State Support Agreement are as

follows:

1. Compliance to all applicable laws and permits;


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2. Compliance to the provisions of the Concession Agreement and the Project

Agreements;

3. Compliance to the State Support Agreement;

4. Maintain a project account for all receipt and payments related to the Project and get

the same audited by a statutory auditor;

5. Undertake to provide the necessary documentation, utilization certificates, reports,

etc. as required by the schemes guidelines.


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3. Obligations of District Rural Development Agency (DRDA)

As highlighted in the earlier section, the District Rural Development Agency (DRDA) is a party

to the Concession Agreement and shall have the following obligations.

3.1. Creation of a dedicated bank account for each PURA project

1. The DRDA shall, within 180 days from the Appointed Date, create a dedicated bank account

for each PURA project.

2. All the funds, constituting the Scheme Funds and PURA Grant, shall be credited to such

dedicated bank account in accordance with the terms of the Concession Agreement.

3. The DRDA shall operate and maintain such dedicated bank account in accordance with the

provision of the Concession Agreement and shall not use the account for its own or any other

purpose.

4. The interest that shall accrue on the funds lying on deposit in such dedicated bank account

shall be used in connection with the performance of obligations of Gram Panchayats under

this Concession Agreement in accordance with the instructions and directions of the Ministry

of Rural Development (MoRD). Such amount shall be termed as the “Risk Fund”.

5. Subject to the provisions of the Concession Agreement, upon termination of the Concession

Agreement, all amounts standing to the credit of the dedicated bank account shall be:

a. returned to MoRD in case of the MoRD’s share of Scheme Fund under the MoRD

Schemes and the PURA Grant;

b. returned to the Government of the State in case of the State’s share of the Scheme

Fund under the MoRD Schemes and the non MoRD Schemes;

c. returned to the relevant Government Instrumentality (other than MoRD) in case of

Scheme Fund available under the non MoRD Schemes; and

d. returned to MoRD or in accordance with its direction in case of any other amounts.

3.2. Procurement and release of Scheme Funds

Scheme Fund means the cash support available for the Project under the relevant MoRD and/or

the non MoRD Schemes as per the funding mechanism mentioned in the respective Scheme

Guidelines. The Scheme Funds sought by the Concessionaire, for its PURA project, shall be


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quantified and detailed out in the Approved Detailed Project Report, along with the respective

payment schedules.

3.2.1. Procurement of Scheme Funds

1. The Scheme Fund shall be requested by the DRDA from the relevant Government

Instrumentality and released by the relevant Government Instrumentality to the

DRDA, atleast six months before its indicative release as specified in the Concession

Agreement.

2. DRDA shall deposit the Scheme Fund in the dedicated bank account maintained for

the PURA project.

3. It is to be noted that as a conditions precedent of the Concession Agreement, the first

installment of the Scheme Fund shall be requested by DRDA from the relevant

Government Instrumentality and released by the Government Instrumentality to

DRDA and deposited by the DRDA in the dedicated bank account within 180 days

from the Appointed Date.

3.2.2. Release of the Scheme Funds

1. The process of release of relevant installment of Scheme Funds, as per the approved

DPR, shall be initiated by the Concessionaire, by making a request to each of the

Gram Panchayats;

2. Along with the request, the Concessionaire shall submit a Utilization Certificate, as

per the format and terms of the applicable Scheme Guidelines;

3. The Gram Panchayat(s) shall forward this request, along with the necessary

documentation, to the Independent Engineer;

4. The Independent Engineer shall verify the documents submitted by the

Concessionaire. If the Concessionaire is performing its obligations as per the

Concession Agreement and has achieved the relevant milestones, then the

Independent Engineer shall issue a certificate to the Gram Panchayat(s) in this regard;

5. The Gram Panchayat(s) shall within one week of issue of such certificate give its

concurrence to the same;

6. Such certification by the Independent Engineer along with the concurrence of the

Gram Panchayat(s) shall then be submitted by the Concessionaire to the DRDA;


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7. DRDA, within one week from receipt of the above certification, shall release the

relevant installment of the Scheme Fund to the Concessionaire.

3.3. Procurement and release of PURA Grant

PURA Grant is the capital grant available under the PURA Scheme to the Concessionaire subject

to a maximum of 35% of the project cost. The PURA Grant sought by the Concessionaire, for its

PURA project, shall be quantified and detailed out in the Approved Detailed Project Report. The

payment of the PURA Grant shall be governed by the terms of the Concession Agreement.

3.3.1. Procurement of PURA Grant

1. The Scheme Fund shall be requested by the DRDA from the Ministry of Rural

Development (MoRD) and released by the MoRD to the DRDA, atleast six months

before its indicative release as specified in the Concession Agreement.

2. DRDA shall deposit the PURA Grant in the dedicated bank account maintained for

the PURA project.

3. It is to be noted that as a conditions precedent of the Concession Agreement, the first

installment of the PURA Grant shall be requested by DRDA from the MoRD and

released by the MoRD to DRDA and deposited by the DRDA in the dedicated bank

account within 180 days from the Appointed Date.

3.3.2. Release of the PURA Grant

1. The process of release of relevant installment of PURA Grant, as per the approved

DPR, shall be initiated by the Concessionaire, by making a request to each of the

Gram Panchayats;

2. Along with the request, the Concessionaire shall submit the Performance Security

corresponding the PURA Grant installment, as per the format and terms of the

Concession Agreement;

3. The Gram Panchayat(s) shall forward this request, along with the necessary

documentation, to the Independent Engineer;

4. The Independent Engineer shall verify the documents submitted by the

Concessionaire. If the Concessionaire is performing its obligations as per the

Concession Agreement and has achieved the relevant milestones, then the

Independent Engineer shall issue a certificate to the Gram Panchayat(s) in this regard;


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5. The Gram Panchayat(s) shall within one week of issue of such certificate give its

concurrence to the same;

6. Such certification and other documentation issued by the Independent Engineer along

with the concurrence of the Gram Panchayat(s) shall then be submitted by the

Concessionaire to the DRDA;

7. DRDA, within one week from receipt of the certification and the necessary

documentation from the Independent Engineer, shall release the relevant installment

of the PURA Grant to the Concessionaire.

3.4. Maintaining custody of the Performance Security

Subject to the terms and conditions of the Concession Agreement, the Concessionaire shall

provide a Performance Security for an amount equal to the sum of PURA Grant and 3% of

Project Cost. The Performance Security shall be provided in the form of a bank guarantee as per

the format specified under Schedule H of the Part III of the Concession Agreement. The bank

guarantee shall be addressed to the DRDA.

3.4.1. Build-up schedule of Performance Security

Further to the provisions of the Concession Agreement, the following build-up schedule

shall be adhered by the Concessionaire.

1. 3% of the Project Cost on the Appointed Date;

2. 25% of the PURA Grant within 180 days from the Appointed Date;

3. 25% of the PURA Grant after submission of 25% project completion certificate;

4. 25% of the PURA grant after submission of 50% project completion certificate for

the second installment;

5. 25% of the PURA grant on the Scheduled Project Completion Date or Commercial

Operations Date.

3.4.2. Release schedule of Performance Security

Further to the provisions of the Concession Agreement, the following release schedule

shall be followed by the DRDA.


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1. Performance Security amounting to 3% of the Project Cost on the second anniversary

of the Commercial Operations Date (COD);

2. Performance Security amounting to 15% of the PURA Grant ‘each’ on 3rd

to 7th

anniversary of COD;

3. Performance Security amounting to 25% of the PURA Grant after 120 days from

expiry of Concession Agreement.

3.4.3. Appropriation of the Performance Security

In the event of Concessionaire Event of Default, the Gram Panchayat, under the

provisions of the Concession Agreement, shall inform the DRDA to initiate the procedure

to encash the relevant amount of Performance Security. The encashment of the

Performance Security shall be made by the DRDA if it has been: (a) recommended by the

Independent Engineer; (b) concurred by each of the Gram Panchayats; and (c)

consequently, ratified by the Coordination Committee (excluding the Concessionaire’s

member). The Concessionaire shall replenish the Performance Security to its full value

as per the provisions of the Concession Agreement, within 30 days of such encashment.

3.5. Role in the Dispute Resolution Process

Any dispute, difference or controversy of whatever nature howsoever arising under or out of or

in relation to the Concession Agreement between the Parties and DRDA and so notified in

writing by either Party and/or DRDA to the other Party and/or DRDA shall be resolved through a

four level dispute resolution process under the Concession Agreement.

1. 1st Level: In the first instance, the resolution should be attempted through mutual discussion

between all Parties and the DRDA;

2. 2nd

Level: Any dispute, which is not resolved within 30 days of a reference by any Party or

DRDA to the other Parties or DRDA, shall be referred to the Independent Engineer for

resolution;

3. 3rd

Level: Any dispute, which is not resolved within 30 days of a reference to the

Independent Engineer, shall be referred to the Coordination Committee. The Coordination

Committee shall comprise of the District Collector and one representative each of the State

Government, DRDA, Concessionaire and each of the Gram Panchayats;

4. 4th

Level: Any dispute, if not settled through the Coordination Committee within 30 days of a

reference to it, shall be referred to a committee under the chairpersonship of Joint Secretary,


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MoRD. This committee shall comprise of the one representative each of State Government,

DRDA, Concessionaire and each of the Gram Panchayats;

5. 5th

Level: Any dispute, if not settled through the committee under the chairpersonship of

Joint Secretary, MoRD, within 30 days of a reference to it, shall be finally settled by

arbitration in accordance with the prevailing International Centre for Alternate Dispute

Resolution Arbitration Rules, 1996 (ICADR Rules).

DRDA's_20role_20in_20PU20projects202022032011.pdf

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