The public entity can transfer only such rights as are vested in it and, therefore, the scope of services/rights that are transferred to the private partner must be reasonable and justified. For every project, there is only one appropriate entity which has the legal authority to grant rights to a private partner.
For instance, the district administration of district 'A' would not be the appropriate authority to develop a zilla panchayat road in district 'B'. Nor would a water board be the appropriate authority to grant rights to a private partner in the development of a scientific landfill for the disposal of municipal solid waste.
In a particular case, where a bypass road was to be developed at Sandur in Bellary Karnataka, the road to be developed was a zilla panchayat road which belonged to the Department of Rural Development and Panchayati Raj (RDPR). The State Government required the Public Works Department to develop the bypass road. Therefore, the Government issued a Government Order transferring the ownership of the road from RDPR to PWD. Later, PWD developed the road through a PPP framework.
| Adherence to the Legal Framework during Project Structuring The scope of services/rights that are being transferred to the private partner as part of the project structure must be in accordance with the prevailing legal framework. A few of the aspects that need to be borne in mind while finalising the contours of the project include: 1. Can the public entity levy and collect user fees from beneficiaries? 2. Can the private partner collect user fees? 3. Can the user fee collected from the beneficiaries serve as consideration to the private partner for the project? 4. Can the private partner have the right to discontinue the services to beneficiaries who do not pay user fees? 5. Can the private partner be allowed Rights of Way over private properties in order to rectify/repair the developed project? 6. Can the private partner be made liable for assets that are defective for historical reasons that pre-date its appointment? 7. Can the private partner be allowed access to and rights to use the public assets of the public entity? 8. Can the private partner be given the right to manage and control the employees of the public entity? |