Is there any check on the public funds spent through PPP?
The socialistic model of development followed by India has relied heavily on the public sector which is gradually giving space to the Public – Private – Partnerships (PPP’s). The PPP projects have emerged as an important vehicle for economic development, which provides the much needed market orientation to the enterprise, apart from adding operational efficiency and resources. In this context, it is necessary to examine whether there is transparency in the manner the funds are being spent and whether there is any auditing of the money spent.
The Central Information Commission (CIC) has taken a view that the PPP’s are covered under the RTI Act. The orders of the CIC, however, have not been implemented as they are under litigation and a stay has been obtained from a higher judicial forum. In January, 2011 the Chief Information Commissioner at the CIC Mr. Satyananda Mishra, had written to the Planning Commission making certain recommendations for making PPPs compliant with the RTI Act to avoid the unnecessary litigation going in the matter. In his reply to the CIC, the Deputy Chairman of the Planning Commission stated as follows:
"The Planning Commission does not execute the concession agreements with PPPs but these are done by the concerned Ministries/Departments/Public Sector undertakings. The Planning Commission however has published several Model Concession Agreements (MCAs) for various types of PPPs. If these MCAs are followed by any PPP then any person can obtain certified copies of the concession agreements, maintenance manuals, maintenance programme and maintenance requirements in respect of each project directly from the concessionaire." (i.e. the entity actually implementing the PPP).
A close scrutiny of the reply of the Deputy Chairman of the Planning Commission to the CIC shows the use of the terms ‘if’ and ‘then’ thereby implying that transparency in PPPs is conditional. The reply shows that the certified copies of the concession agreements would be available if the model concession agreements are followed and by implication means that if the model concession agreements are not followed, the copies of the agreements would not be available.
In this context, it is important to examine whether the money spent through the PPP from the public funds is audited by the Comptroller and Auditor General (CAG). A RTI application was filed by Mr. Venkatesh Nayak of CHRI to find out how many PPPs are audited by the CAG, after issuing auditing guidelines in 2008. The application read:
"a) The list of names, geographical location and the implementation status of Private Public Partnership (PPP) projects audited under the authority of the C&AG during the period 1st April 2008 – 1st August 2011;
b) Please indicate whether copies of the audit reports for all the PPP projects mentioned above are available in the public domain free of cost or as priced publications;
c) Please indicate the authority responsible for providing to any member of the public copies of audit reports of PPP Projects;
d) Please indicate whether audit reports of PPPs under Central Government are placed before any parliamentary committee for scrutiny, if so the name of such committee and a brief description of all the stages involved in the scrutiny process may please be provided."
The PIO did not send a reply within the prescribed time-limit. On appeal, the First Appellate Authority forwarded the copy of the reply of the PIO free of cost, which shows:-
- During the period April 2008 - August 2011 the C&AG had not audited any PPPs in Uttar Pradesh, Bihar, Goa and the Union Territory of Puducherry.
- 15 projects were audited in West Bengal, 3 each in Delhi, Haryana and Kerala, 2 each in Maharashtra and Jharkhand, and 1 each in Karnataka, Rajasthan, Tamil Nadu, Sikkim and Uttarakhand.
- There is no mention of the States of Assam (projects worth Rs. 8,300 crores are shown on the website: www.pppindia.com), or Gujarat (projects worth Rs. 62,300 crores are shown on the website: www.pppindia.com) or Madhya Pradesh (projects worth Rs. 18,200 crores are shown on the website: www.pppindia.com) or Orissa (projects worth Rs. 16,005 crores are shown on the website: www.pppindia.com; interestingly 11 of the 62 projects do not have any estimated cost mentioned against them). Whether the PPPs in these States are being audited by the C&AG or its subordinate offices is not known.
- The CAG in its reply stated that no separate report of audit of PPPs is prepared. Instead they are reported in the regular audit reports of the concerned departments. The CAG does not maintain sector-wise information about the audit of PPPs under Central Government.
This implies that the citizens are unable to get information about PPPs from them directly, or through the nodal departments in governments. It can also be deduced that very few PPP projects are audited and even amongst those audited, the audit reports of PPPs not easily available. Recently some organisations like the Public Health Foundation of India (PHFI) has preferred to come under the disclosure after being called up by the CIC when an appeal was filed to it. However, such cases are rare. One can only hope that the judiciary is able to dispose the appeals against the orders of the Central Information Commission expeditiously as the quantum of funding involved in different PPPs is nearly Rs. 3 lakh crores and is going to rise in the years to come.