The Andhra Pradesh Infrastructure Development Enabling Act, 2001.
**THE ANDHRA PRADESH INFRASTRUCTURE**
**DEVELOPMENT ENABLING ACT, 2001**

**ACT No. 36 OF 2001**

**ARRANGEMENT OF SECTIONS**

**CHAPTER I**

**PRELIMINARY**

**Sections**

1. Short title, extent, application and commencement
2. Definitions

**CHAPTER II**
**ESTABLISHMENT, CONDUCT OF BUSINESS AND**
**EMPLOYEES OF THE INFRASTRUCTURE AUTHORITY**

3. Constitution of Infrastructure Authority
4. Composition of the Authority
5. Term of office of the members
6. Terms and conditions of Service
7. Meetings of the Authority
8. Appointment of officers and staff of the Authority
9. Constitution of Committees
10. Functions of the Infrastructure Authority
11. Powers of the Infrastructure Authority
12. Report to the Government

**CHAPTER III**

**INFRASTRUCTURE PROJECT DELIVERY PROCESS**

13. Participation in infrastructure project
14. Project identification
15. Priortisation of projects
16. Recommendations by the Infrastructure Authority
17. Sanction by the Government
18. Consultant selection
19. Developer Selection process
(I) Direct Negotiations
(II) Swiss Challenge Approach
(III) Competitive Bidding
20. Approval of contract principles
21. Selection criteria
22. Treatment of Sole Bid
23. Treatment of limited response
24. Treatment of Bid submitted by a consortium
25. Speculative bids
26. No negotiation on financial or commercial proposal
27. Bid security


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**CHAPTER IV**

**GENERIC RISKS DISCLOSURE AND ALLOCATION,**
**SECURITISATION, RIGHT OF LENDERS AND FACILITIES TO**
**BE PROVIDED BY THE GOVERNMENT AGENCY OR THE LOCAL**
**AUTHORITY**

28. Generic Risks Disclosure and its allocation and treatment
29. Facilitation of securitisation
30. Rights of lenders
31. Facilities to be provided by the Government Agency or the Local
Authority

**CHAPTER V**
**CONCILIATION BOARD**

32. Establishment of Board
33. Constitution of the Board
34. Head Quarters
35. Term of office of the members
36. Terms and conditions of appointment
37. Functions of the Board.
38. Administrative assistance
39. Powers of the Board
40. Judicial proceeding

**CHAPTER VI**
**CONCILIATION PROCEEDINGS**

41. Application and scope
42 Commencement of conciliation proceedings
43. The Board and certain Enactments
44. Co-operation of the Parties with the board
45 Suggestions by parties for settlement of dispute
46. Settlement agreement
47. Status and effect of settlement agreement
48. Termination of conciliation proceedings
49. Resort to Arbitral or Judicial Proceedings
50. Commencement of arbitral or judicial proceedings
51. Costs
52. Nil
53. Admissibility of evidence in other proceedings

**CHAPTER VII**
**INFRASTRUCTURE PROJECTS FUND**

54. Establishment of the fund
55. Fees and charges to be credited to the fund
56. Administration of the fund
57. Utilisation of the fund
58. Operation of the fund
59. Formulation of policy and regulations for the fund
60. Audit report of the fund

**CHAPTER VIII**
**MISCELLANEOUS**

61. Control by Government
62. Transparency
63. Abuser charges


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64. Polluter charges
65. Appeal
66. Indemnity by the Developer
67. Recovery of costs, charges, dues, fees, and fines
68. Application of fines and charges
69. Penalties
70. Offences by companies
71. Power to compound offences
72. Cognizance of offences
73. Penalties and proceedings not to Prejudice other actions
74. Protection of action taken in good faith
75. Members and staff of Infrastructure Authority or Conciliation
Board to be Public Servants
76. Bar of jurisdiction
77. Power to remove difficulties
78. Power to make regulations
79. Power to make rules
80. Delegation of powers
81. Act to override other state laws
82. Repeal of Ordinance 4 of 2001.
84. Transitional Provision


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**SCHEDULE- I**

**(See Section 2 (h))**

**SCHEDULE- II**

**(See Section 2 (e))**
**CATEGORIES OF PROJECTS**

**SCHEDULE- III**

**(See Section 2 (nn))**
**SECTORS**

**SCHEDULE- IV**

**(See Section 2 (1))**
**GENERIC RISKS**

**SCHEDULE- V**

**(See Section 2 (rr))**
**STATE SUPPORT**


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**THE ANDHRA PRADESH INFRASTRUCTURE**
**DEVELOPMENT ENABLING ACT, 2001**

**ACT NO. 36 OF 2001**

[10[th] October, 2001]

**AN ACT TO PROVIDE FOR THE RAPID DEVELOPMENT OF PHYSICAL AND**
**SOCIAL INFRASTRUCTURE IN THE STATE AND ATTRACT PRIVATE**
**SECTOR** **PARTICIPATION** **IN** **THE** **DESIGNING,** **FINANCING,**
**CONSTRUCTION, OPERATION AND MAINTENANCE OF INFRASTRUCTURE**
**PROJECTS** **IN** **THE** **STATE** **AND** **PROVIDE** **A** **COMPREHENSIVE**
**LEGISLATION FOR REDUCING ADMINISTRATIVE AND PROCEDURAL**
**DELAYS, IDENTIFYING GENERIC PROJECT RISKS, DETAILING VARIOUS**
**INCENTIVES,** **DETAILING** **THE** **PROJECT** **DELIVERY** **PROCESS,**
**PROCEDURES FOR RECONCILIATION OF DISPUTES AND ALSO TO**
**PROVIDE FOR OTHER ANCILLARY AND INCIDENTAL MATTERS**
**THERETO WITH A VIEW TO PRESENTING BANKABLE PROJECTS TO THE**
**PRIVATE SECTOR AND IMPROVING LEVEL OF INFRASTRUCTURE IN THE**
**STATE OF ANDHRA PRADESH AND FOR MATTERS CONNECTED THEREIN**
**OR INCIDENTAL THERETO.**

Be it enacted by the Legislative Assembly of the State of Andhra Pradesh
in the Fifty Second year of the Republic of India as follows:

**CHAPTER - I**
**PRELIMINARY**

**1. Short title, extent, application and commencement – (1) This Act may**
be called the Andhra Pradesh Infrastructure Development Enabling Act, 2001.

(2) It extends to the whole of the State of Andhra Pradesh.

(3) It shall apply to all infrastructure Projects implemented through
Public Private Partnership in the sectors enumerated in Schedule III of the Act
and to such other sectors as may be notified by the Government under the Act
from time to time. The Act will not apply to any infrastructure Project which is
undertaken by any joint venture between the State or Central Government
Departments or between the State or Central Government and any Statutory
Body or between any Statutory Bodies or between the State or Central
Government or Statutory Body and any Government Company or any
infrastructure Project which may be taken over by any private party or private
sector undertaking upon privatisation or dis-investment by the State or Central
Government or Government Agency or by any Statutory Corporation or any
Government Company or any Infrastructure Project which does not involve
fresh, new, additional investment being made by a private sector participant or
any Infrastructure Project which is expressly notified to be excluded from the
provisions of the Act by the Government.

(4) It shall be deemed to have come into force with effect on and from the
20[th] August, 2001.

**2.** **Definitions – In this Act unless the context otherwise requires;-**

(a) “Act” means the Andhra Pradesh Infrastructure Development
Enabling Act, 2001;

(b) “Best Effort” means best efforts made in the circumstances;

(c) “Bidder” means any entity including any Bidding
Consortium, who has submitted a proposal to undertake an
infrastructure project under Public Private Partnership;


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(d) “Bidding Consortium” means if the proposal for the project is
made jointly by more than one entity, then such group of entities
shall be referred to as a Bidding Consortium;

(e) “Categories of Projects” means categories specified in
schedule –II of the Act and such other categories as may be
notified by the Government from time to time;

(f) “Charges for Abuse or Abuser Charges” means the levy of
charges by the Infrastructure Authority on any developer, if any
developer abuses any right accorded under the Concession
Agreement, in the course of development, implementation,
operation, maintenance, management and transfer of any
Infrastructure Project, to the extent as may be specified in the
Concession Agreement or such other agreement as may be
prescribed by the Government;

(g) “Company” means any entity incorporated by memorandum
of association under the Companies Act, 1956 (Central Act 1 of
1956) or incorporated under any other statute or deemed to be
incorporated under the laws of India or the laws of any other
country of the world;

(h) “Concession Agreement” means a contract of the nature
specified in Schedule- I between the developer and the State
Government or Government Agency or the Local Authority relating
to any Infrastructure Project or such other contract as may be
prescribed from time to time by Government;

(i) “Conciliation Board” means the Conciliation Board
established under section 32 of the Act;
1[Provided that unless the parties otherwise agreed the
provisions of chapters V and VI of the Act shall not apply to any of
the projects under taken as per provisions of the Act];

(j) “Construction” means any construction, reconstruction,
rehabilitation, improvement, expansion, addition, alteration and
related works and activities including supply of any equipment,
materials, labour and services related to build or rehabilitate any
Infrastructure Project comprising of physical structures or systems
or commodities or for utilization of resources or provision of
services;

(k) “Developer” means any Private Sector Participant who has
entered into a contract for the Infrastructure Project with the
Government or Government Agency or Local Authority under the
Act;

(l) “Generic Risks” means circumstances that have the potential
to adversely affect the development of a project or interest of the
participants to the Project or interest of the Government or
Government Agency or Local Authority and in the nature of
construction period risk, operation period risk, market and
revenue risk, finance risk, legal risk and miscellaneous risks as
enumerated in Schedule – IV of the Act;

(m) “Government” means the State Government of Andhra
Pradesh;

1. Proviso added by Act 3 of 2017, S.2.


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(n) “Government Agency” means any department of the
Government or any corporation or body owned or controlled by the
Government by reason of the Government holding not less than
fifty one percent of paid-up share capital in such corporation or
body;

(o) “Government Company” means any company in which not
less than fifty-one per cent of the paid-up share capital is held by
the Central Government, or by any State Government or
Governments, or partly by the Central Government and partly by
one or more State Governments and includes a company which is
a subsidiary of a Government company as defined;

(p) “Fund” means the Infrastructure Projects Fund established
under section 54 of the Act;

(q) “Infrastructure Authority” means the Authority constituted
under section 3 of the Act;

(r) “Infrastructure” means public works relating to
infrastructure for utilising the natural resources and providing
services by either public works of physical structure or systems for
facilities or commodities or utilisation of resources or provision of
services;

(s) “Infrastructure Project or Project” means a project in the
sectors as notified under the Act by the Government;

1[(sa) “Implementing Agency” means any department of
Government, any Government Corporation or Public Sector
undertaking and Government Agencies etc., which shall implement
their projects independently by following the procedure i.e.,
Business Rules of their department, and other rules being followed
by respective Government Departments, Government Agencies,
Public Sector undertaking respectively. The Infrastructure
Authority may be chosen to be Implementing Agency and frame its
own procedure for such projects;]

(t) “Investment” means preliminary and pre-operative expenses,
capital expenditure, lease on land and equipment interest during
construction, administrative expenses, all operating and
maintenance expenses including expenses incurred on recovery of
User Levies;

(u) “Lead consortium Member” means in case of a Bidding
Consortium, that consortium member vested with the prime
responsibility of developing a project, holding not less than 26%
equity stake in the Bidding Consortium and also holding the
highest equity stake amongst all other consortium members. In the
event of two or more consortium members holding the highest
equal stake, the Bidding Consortium shall clearly indicate in the
Bid which consortium member is to be considered the Lead
Consortium Member and the consortium member so indicated or
named shall be the Lead Consortium Member;

(v) “Lender” means a financial institution or bank or any
entity providing financial assistance with or without security or
giving any advances to any Developer for completing or
implementing any project under the Act;

1. Ins. new clause by Act 3 of 2017, S.2.


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(w) “Linkage Infrastructure Project” means from any project
under the Act any road link to the nearest State highway, national
highway or rail link or water transmission link to the nearest
practical water source including an existing pipeline or canal or
water body or sewerage link to the nearest practical sewerage
transmission line or sewerage treatment facility or such other
facility;

(x) “Mega Infrastructure Project” means any Project
implemented or undertaken through Public Private Partnership
under the Act requiring an investment may be prescribed by the
Infrastructure Authority;

(y) “Local Authority” means any Municipal Corporation or
Municipal Council or any Panchayat or any other statutory body
formed, elected or appointed for local self- Government;

(z) “Local Laws” means laws other than Central laws and
applicable to the State;

(aa) “Member” means a member of the Infrastructure Authority
which includes the Chairperson, the Vice- Chairperson and any
other member of the Infrastructure Authority;

(bb) “Non Profit Organisation” means any organization formed for
promoting commerce, art, science, religion, charity or any other
useful object and applies its income in promoting its objects and
prohibits the payment of any dividend to its members and does not
allow its corpus or income to be lent or advance or diverted or
utilised or exploited by its members or office bearers or any other
company in which they or any of them may be interested or
connected;

(cc) “Notification” means a notification published in the Andhra
Pradesh Gazette and the word “notified” shall be construed
accordingly;

(dd) “Person” shall include any company or association or body of
individuals whether incorporated or not;

(ee) “Polluter Charges” means levy of prescribed charges by the
Infrastructure Authority on any Developer, if any Developer
polluters the environment or does not adhere to the specifications
and measures for environment preservation and conservation
agreed under the contract with the Government or the Government
Agency or the Local Authority or fails to stop polluting the
environment with in thirty days of receipt of notice in writing from
the Infrastructure Authority or the Government Agency or the
Local Authority;

(ff) [1][*          -          -          -          - *]

(gg) “Private Sector Participant” means any person other than
Central Government or State Government or Government Agency
or any joint venture between Central Government or State
Government department or any Statutory Body or Authority or
Local Authority or any Corporation or Company in which Central
Government or State Government or Government Agency,

1. The clause (ff) omitted by Act 3 of 2017, S.2.


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Statutory Body or Authority or Local Body is holding not less than
fifty one percent paid-up share capital;

(hh) “Prescribed” means prescribed by rules or regulations made
under this Act;

1[(hhh) ‘Project’ means a project deemed to have been initiated by the
Government or the Government agency or the Local Authority, if

(a) total budgetary allocation for development of such project has
been made by the Government or the Government Agency or the
Local Authority and

(b) public announcements calling for bids for development of the
project have been issued by the Government or Government Agency
or the Local Authority;]

(ii) “Prospective Lenders” means financial institutions, banks or
any other entities of such project financing track record as may be
prescribed, who in principle or agreeable to provide guarantees or
finance to the Bidder under any of the financing documents;

(jj) “Public Private Partnership” means investment by the Private
Sector Participant in an Infrastructure Project of the Government
Agency or the Local Authority in the State;

(kk) “Regulations” means regulations made under section 78 of
the Act;

(ll) “Responsive Bid” means a bid from an eligible Bidder which
complies with all the requirements prescribed by the tender
documents or other documents as the case may be;

(mm) “Rules” means rules made under section 79 of Act;

(nn)  “Sectors” means sectors as notified under Schedule- III of
the Act and as may be notified from time to time by the
Government.

(oo) “Sector Regulator” means the regulatory authority for a
Sector or Sectors as may be notified by the Government from time
to time;

(pp) “Sole Bid” means when in competitive bidding process there
is only one Responsive Bid received by the Government Agency or
the Local Authority;

(qq) “State” means the State Government of Andhra Pradesh;

(rr) “State Support” means a grant by the state of any
administrative support, asset-based support, foregoing revenue
benefits support, undertaking contingent liabilities by providing
guarantees or financial support to the Developer as enumerated in
Schedule V of the Act;

(ss) “Swiss Challenge Approach” means when a Private Sector
Participant (Original Project Proponent) submits an unsolicited or
suo-mottu proposals and draft contract principles for undertaking
a category II Project, not already initiated by the Government

1. The clause (hhh) inserted by Act 1 of 2016, S.2.


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Agency or the Local Authority and the Government Agency or the
Local Authority then invites competitive counter proposals in such
manner as may be prescribed by the Government. The proposal
and contract principles of the Original Project Proponent would be
made available to any interested applicants, however, proprietary
information contained in the original proposal shall remain
confidential and will not be disclosed. The applicants then will
have an opportunity to better the Original Project Proponent’s
proposal. If the Government finds one of the competing counter
proposals more attractive, then the Original Project Proponent will
be given the opportunity to match the competing counter proposal
and win the Project. In case the Original Project Proponent is not
able to match the more attractive and competing counter
proposals, the project is awarded to the Private Sector Participant,
submitting the more attractive competing counter proposal;

1[Provided that the interested applicants shall mean only qualified
bidders.

Provided further that the proprietary information means and
includes the business plan of the proponent viz., Technical data, the
commercial information and plans or design etc., prepared by proponent
but not the revenue share offered by proponent.]

(tt) “Unsolicited or suo-mottu Proposal” means a proposal in
respect of a Project not already initiated by the Government Agency
or Local Authority and which proposal is submitted by any Private
Sector Participant to the Government Agency or Local Authority in
respect of any Infrastructure in the State supported by Project
specifications, technical, commercial and financial viability and
prima facie evidence of the financial and technical ability of such
Private Sector Participant to undertake such Project with full
details of composition of the Private Sector Participant and his
financial and business background; and

(uu) “User levis” means the right or authority granted to the
developer by the Government Agency or the Local Authority to
recover investment and fair return on investment and includes toll,
fee, charge or benefit by any name;

**CHAPTER - II**
**ESTABLISHMENT, CONDUCT OF BUSINESS AND**
**EMPLOYEES OF THE INFRASTRUCTURE AUTHORITY**

**3. Constitution of Infrastructure Authority - (1) The Government may, by**
notification and with effect on and from such date as may be specified therein
constitute an authority to be called, “the Infrastructure Authority”.

(2) The Authority constituted under sub-section(1) shall be a body
corporate having perpetual succession and a common seal, with power to
acquire, hold and dispose of property both movable and immovable to do all
things incidental to and necessary for the purposes of this Act and to contract
and may by the said name sue and be sued.

(3) The headquarters of the authority shall be at Hyderabad or at such
other place as may be notified.

1.The provisos added by Act 3 of 2017, Sec.2.


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**4. Composition of the Authority - (1) The Authority shall consist of a**
Chairperson, 1[Vice Chairperson] and such other members not exceeding
fifteen in the aggregate including Ex-officio members.
2“(2) [The Chief Secretary to the Government or any other person with
equivalent experience shall be the Chairperson of the authority”].

3[“(2A) The Principal Secretary to Government, Infrastructure and
Investment Department shall be the Vice Chairperson of the Authority”]

(3) The Ex-officio members of the Authority shall be the following:
(i) Secretary to the Government, Finance and Planning (Finance
Wing) Department;

(ii) Secretary to the Government, Transport, Roads and Buildings
Department;

(iii) Secretary to the Government, Municipal Administration and
Urban Development Department;

(iv) Secretary to the Government, Information Technology
Department;

(v) 4[Managing Director, Infrastructure Corporation of Andhra
Pradesh];

(vi) [5][XXXX]

(4) The Members other than those specified in sub-section (3) shall be
appointed by the Government in the manner prescribed.

**5. Term of Office of the Members - Every member other than the Ex-officio**
member shall hold office during the pleasure of the Government,

**6. Terms and conditions of service - The terms and conditions of service of**
the members of the Authority including the honororia and the allowances to be
paid to them shall be such as may be prescribed.

**7.** [6][* - - - *]

**8. Appointment of officers and staff of the Authority - The Authority may**
appoint such officers and members of staff as it may require in carrying out
its functions and discharging its duties under this Act in such manner as may
be prescribed.

**9. Constitution of Committees –**
(1) [7][* - - - *]

(2) The Authority shall invite such persons from the fields of banking,
commerce, industry, environment, law, technology and the like as may be
nominated by the Government from time to time to assist the Authority in
carrying out its functions under this Act on such terms and conditions as may
be prescribed.

1 . The words ‘Vice Chairperson’ inserted by Act 9 of 2006, Sec.2.
2 . The sub-section (2) Subs. by Act 18 of 2002, Sec.2.
3 . The sub-section (2A) inserted by Act 9 of 2006, Sec.2.
4 . The proviso (V) Subs. by Act 9 of 2006, Sec.2.
5 . The clause(Vi) omitted by Act 9 of 2006, Sec.2.
6 . The Sec.7 omitted by Act 3 of 2017, Sec.3.
7 . In Sec.9 sub-section (1) omitted by Act 3 of 2017, Sec.4.


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**10. Functions of the Infrastructure Authority -** The functions of the
Infrastructure Authority shall be as follows:(a) to conceptualise and identify projects and ensure their
conformance to the objectives of the State 1[for such
conceptualized projects];

(b) [2][*        -        -        - *]

(c) 2[*         -         -         - *]

(d) 2[*        -        -        - *]

(e) 2 [*         -         -         - *]
(f) 2 [*          -          -          - *]

(g) 2 [*         -         -         - *]

(h) 2 [*     *        -        - *]

(i) 2 [*     *           -           - *]

(j) 3 [*           -           - *]

(k) 2 [*     *        -        - *]

(l) 2 [*     *           -           - *]

(m) 2 [*     *       -       - *]

(n) 2 [*        -        -        - *]

(o) 2 [*         -         -         - *]

(p) 2 [*     *        -        - *]

(q) to decide issues pertaining to user levies including but not
limiting to prescribing mechanism and procedure for setting,
revising, collecting and / or regulating user levies and to decide
and settle disputes relating to user levies;

(r)  to approve sectoral policies and model contract principles;

(s) 4[*     *         -         - *]

(t) [4][*     *          -          - *]

(u) to administer and manage the Fund and its assets;

(v) [4][*     *         -         - *]

1. The words ‘for such conceptualized projects’ added by Act 3 of 2017, Sec.5.

2 .Clauses (b) to (p) omitted by Act 3 of 2017, Sec.5.

3. Clause (j) omitted by Act No. 1 of 2016, S.3.
4. Clauses (s), (t) and (v) omitted by Act 3 of 2017, Sec.5.


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(w) [1][*     *       -       - *]

(x) [1][*     *         -         - *]

(y) to fix and provide for recovery of fees, levies, tolls and charges
as may be specified from time to time;

(z) to levy and recover charges for abuse and polluter charges from
the developer;

(aa) [1][*        -        -        - *]

(bb) [1][*       -       -       - *]

**11.** [2][* - - - *]

**12.** [2][* - - - *]

**CHAPTER – III**

**INFRASTRUCTURE PROJECT DELIVERY PROCESS**

**13.** **Participation in Infrastructure Project – Any Private sector participant**
may participate in financing, construction, maintenance, operation and
management of Infrastructure Projects covered under the Act.

**14.[3][ Project Identification – Government or any Government Departments**
or Infrastructure Authority or any Government Public Sector undertaking or
any Government Agency or local body may conceptualize develop and
implement any infrastructure project by following the procedure prescribed by
respective departments or such agencies referred above].

**15.** 4[*     * - - *]

**16.** 4[*     * - - *]

**17.** **Sanction by the Government – The Government shall consider the**
proposal submitted by the Government Agency or Local Authority and the
proposed Concession Agreement and either accept the proposal and
Concession Agreement with or without modification or return the proposal and
Concession Agreement to the Government Agency or the Local Authority for
reconsideration or reject the proposal within such time as may be prescribed.
The Government Agency or the Local Authority will take suitable action on the
decision taken by the Government on the proposal and the Concession
Agreement including revising and resubmitting the proposal and the
Concession Agreement if returned by the Government for reconsideration by
the Government Agency or the Local Authority.

Provided that if the Bidder whose proposal submitted for sanction is not
in a position to implement the project, the Government may at the request of
the Government Agency or the Local Authority [5][* - *  *] consider
the proposal of the Bidder offering the second most competitive bid for
sanction.

1. Clauses (w), (x), (aa) and (bb) omitted by Act 3 of 2017, Sec.5.
2. Sec.11 and Sec.12 omitted by Act 3 of 2017, Sec.6.
3. Sec.14 substituted by Act 3 of 2017, Sec.7.
4 Sec.15 and Sec.16 omitted by Act 3 of 2017, Sec.8.
5. The words ‘with the approval of the Infrastructure Authority’ omitted by Act 3 of 2017, Sec.9.


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**18.** 1[ Consultant Selection – The Government Agency or Local Authority or
public sector undertaking or Infrastructure Authority may select appropriate
consultants as may be required to conceptualize, development or implement
any infrastructure project by following transparent procedure].

**19.** **Developer Selection Processes - The Government Agency or the Local**
Authority may adopt appropriate Developer Selection process including any of
the following processes, namely:
(1) DIRECT NEGOTIATIONS

(1) The Government Agency or the Local Authority may directly negotiate
with a Bidder for implementing;

(a) Category- I projects initiated by a Bidder, or

(b) the projects which involve proprietory technology, or franchise which
is exclusively available with the Bidder globally; or

(c) the projects where competitive bid process has earlier failed to
identify a suitable developer; or

(d)  the projects in prescribed social infrastructure sectors where a nonprofit organisation seeks to develop a project ; or

(e) a linkage Infrastructure Project with the concerned Developer of
Mega Infrastructure Project.

(ii) In case a developer is selected through direct negotiations, the
Government Agency or the Local Authority may renegotiate the financial offer
or recommend that all subsequent procurement for the project is made through
the competitive bidding procurement process, the cost of the project be
determined after such competitive bidding procurement process and
renegotiate the financial offer based on the revised cost of the project.

(II) SWISS CHALLENGE APPROACH

(i) The Swiss Challenge Approach will be followed in any projects
belonging to Category-II initiated by a private sector participant who is
hereinafter referred to as ‘Original Project Proponent’, by a suo-motu
proposal.

(ii) The Original Project Proponent must submit to the Government
Agency or Local Authority:
(a) details of his technical, commercial, managerial and financial
capability;

(b) technical, financial and commercial details of the proposal;

(c) principles of the concession agreement.

(iii) The Government Agency or the Local Authority would first evaluate
the Original Project Proponent’s technical, commercial, managerial and
financial capability as may be prescribed and determine whether the Original
Project Proponents capabilities are adequate for undertaking the project.

1. Sec.18 substituted by Act 3 of 2017, Sec.10.


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(iv) [1][*     *     -     - *]

(v) [1][*     *     -     - *]

(vi) [1][*     *     -     - *]

(vii) [1][*     -     -     - *]

(viii) In the event of the Project not being awarded to the Original Project
Proponent and being awarded to any other Bidder, the Government Agency or
the Local Authority will reimburse to the original Project Proponent reasonable
costs incurred for preparation of the suo-motu proposal and the Concession
Agreement. The suo-motu proposal and the Concession Agreement prepared
by the Original Project Proponent shall be the property of the Government
Agency or the Local Authority as the case may be.

(ix) The reasonable costs of preparation of the suo-motu proposal and the
Concession Agreement shall be determined as per the norms prescribed by the
Government and shall be binding upon the Original Project Proponent.

2[(x) the above Swiss Challenge approach shall however be followed in
respect of a Project Subject to the approval of Competent Authority.]

(III) COMPETITIVE BIDDING

(i) Competitive Bidding will be adopted in all Projects initiated by the
Government Agency or the Local Authority. The notice inviting participation
will be adequately publicised by the Government Agency or the Local Authority
as may be prescribed.

(ii) The bid process will be designed to assist and ascertain, technical,
financial, managerial and commercial capabilities of the Developer.

(iii) In case of a two stage process being adopted for a Mega
Infrastructure Project, the Government Agency or the Local Authority may
require all Bidders to obtain from their Prospective Lenders, financial terms,
expectations regarding State Support, comments on the Concession Agreement
and other project documents (hereinafter called “Deviations”).

(iv) Any Deviations proposed shall be enclosed in a separate envelope and
shall not be part of the envelope containing the financial or the commercial
offer with regard to a project. The procedure for determining the common set
of Deviations and the effect to be given to such common set of Deviations shall
be as may be prescribed.

(v) All proposals shall be opened and evaluated at a common platform in
a free and fair manner.

(vi) It will be open for the Government Agency or the Local Authority to
adopt one or two stage process depending upon the complexity of the project.

(vii) [3][*     -     -     - *]

**20. Approval of contract principles - In case a model contract for a Sector**
has not been adopted or in case there are Deviations proposed vis-à-vis the

1. In Sec.19 in clause II under the heading “Swiss challenge Approach” Sub clauses (iv), (v), (vi) and (vii) omitted
by Act 3 of 2017, Sec.11.
2 Sub clause (x) added after Sub clauses (ix) in clause II under the heading “Swiss challenge Approach” in Sec.19.
3. Sub clause (vii) in clause III under the heading “Competitive Bidding” in Sec.19 omitted by Act 3 of 2017,
Sec.11.


-----

approved model contract for a Sector, then, the [1][Government] will formulate or
approve the contract principles as the case may be.

**21. Selection criteria – The Government Agency or the Local Authority with**
first satisfy itself about the technical ability of the Developer to undertake and
execute the Project and will follow,-
(a) One or combination of one or more of the following criteria for
Developer selection through competitive bidding in Build Own Operate and
Transfer, Build Operate and Transfer and Build Own and Operate Projects:
i) Lowest bid in terms of the present value of user fees;

ii) Highest revenue share to the Government;

iii) Highest up front fee;

iv) Shortest concession period;

v) Lowest present value of the subsidy;

vi) Lowest capital cost and Operation and Management cost for
Projects having a definite scope;

vii) Highest equity premium and

viii) Quantum of State Support solicited in present value.

(b) For Build Transfer, Build Lease and Build Transfer and Lease Projects
Selection criteria used will be the lowest net present value of payments from
the Government.

(c) Such other suitable selection criteria the Infrastructure Authority may
allow or determine.

**22. Treatment of Sole Bid – In case of the competitive bidding process**
resulting into a Sole Bid, the Government Agency or the Local Authority shall
in consultation with the [1][Government], either,
(i) accept the Sole Bid, or

(ii) re-negotiate the financial offer, or

(iii) reject the Sole Bid.

**23. Treatment of limited response – In case the competitive bidding process**
does not generate sufficient response and if even a Sole Bid is not received,
then the Government Agency of the Local Authority shall in consultation with
the [1][Government] either,
(i) modify either the pre-qualification criteria and /or the risk
sharing provisions and restart the bid process; or
(ii) may cancel the competitive bid process; or
(iii)  in case of (ii) above, may have direct negotiation with any
Private Sector Participant.

1. For the words ‘Infrastructure Authority’ the word ‘Government’ shall be substituted in Sec.20, Sec.22, and Sec.23
by Act 3 of 2017, Sec.12.


-----

**24.** **Treatment of Bid submitted by a consortium -(a) All proposals**
submitted by a Bidding Consortium shall enclose a memorandum of
undertaking, executed by all consortium members setting out the role of each
of the consortium members and the proposed equity stake of each of the
consortium members with regard to a Project.

(b) The Lead Consortium Member of a pre-qualified Consortium
cannot be replaced except with the prior permission of the [1][Government] and
which permission will be considered only in case of acquisition or merger of the
Lead Consortium Member Company. Further, after a Bidding Consortium is
selected to implement any Project, the Lead Consortium Member shall
maintain a minimum equity stake of 26% for a period of time, as specified in
the Sector Policy or the Concession Agreement.

(c) Replacement of other Consortium Members may be permitted,
provided the same is not prejudicial to the original strength of Consortium as
determined in course of the evaluation of original bid or proposal.

(d)   Any change in the shareholding or composition of a Consortium
shall be with the approval of the [1][Government].

**25.** **Speculative bids - The Government Agency or the Local Authority with**
the approval of the [1][Government] will be entitled to treat the speculative or
unrealistic bids as non-responsive and reject the same. By reason of any
speculation or unrealistic bid or rejection of such bid, shall not necessarily lead
to termination of the bid process. The [1][Government] will prescribe the norms
for determining the speculative or unrealistic Bids.

**26.** **No negotiation on financial or commercial proposal -** Save as
otherwise provided in the Act the Government, or the Government Agency or
Local Authority will not negotiate with the Bidder on the financial or
commercial aspect of the proposal submitted by the Bidder.

**27.** **Bid Security - (1) The Bidder will be required to submit a bid security**
along with the proposal for undertaking the Infrastructure Project, the bid
security amount will be determined based on the Project cost by the
Government Agency or the Local Authority.

(2) The procedure for refund of bid security will be specified in the
request for proposal. In any event, the bid security of unsuccessful Bidder
would be returned within 30 calendar days from the date of selection of the
Developer.

**CHAPTER - IV**
**GENERIC RISKS DISCLOSURE AND ALLOCATION, SECURITISATION,**
**RIGHT OF LENDERS AND FACILITIES TO BE PROVIDED BY THE**
**GOVERNMENT AGENCY OR THE LOCAL AUTHORITY.**

**28. Generic Risks disclosure and its allocation and treatment - The**
Government Agency or the Local Authority will as far as possible disclose
Generic Risks involved in a Project and a list of such Generic Risks along with
allocation and treatment of such Generic Risks may be provided in the
Concession Agreement or other contract to be entered into between the
Government Agency or the Local Authority and the Developer. The Government
Agency or the Local Authority will make optimum disclosure of the Generic

1. For the words ‘Infrastructure Authority’ the word ‘Government’ shall be substituted in Sec.24, and Sec.25 by Act
3 of 2017, Sec.12.


-----

Risks, however if any risk is not disclosed due to inadvertence or due to
circumstances beyond the control of the Government Agency or the Local
Authority, then the same shall not be a ground for any claim, demand or
dispute by the Developer.

**29.  Facilitation of the securitisation - The Government Agency or the**
Local Authority may facilitate a Developer to securitise Project receivables and
project assets in favour of Lenders subject to such terms as may be fixed by the
Government or by the Infrastructure Authority to safeguard the successful
implementation, competition working, management and control of the project.

**30.  Rights of Lenders – The Lenders will be entitled to recover their dues**
from the Developer and Project receivables in the form of User Levies and in the
event of default by the Developer in completing or implementing a Project, the
Lenders will have the right to substitute the Developer with the consent of the
Government and subject to the approval of such substituted Developer by the
Government Agency or the Local Authority and by the [1][Government], on the
same terms and conditions as applicable to the previous Developer or with
such modifications as may be specifically approved by the [1][Government].

**31. Facilities to be provided by the Government Agency or the Local**
**Authority – The Government Agency or the Local Authority will provide all**
facilities to the Developer for obtaining statutory clearances at State Level, for
providing power and water at Project Site during construction on such terms
as may be prescribed and provide best effort support for obtaining Central
Government clearances and assistance in rehabilitation and resettlement
activities if any incidental to the Project on such terms as may be prescribed.

**CHAPTER-V**
**CONCILIATION BOARD**
**32. Establishment of Board - The State Government may by notification,**
establish a Board to be called the “Conciliation Board” with effect from such
date as may be specified.

**33. Constitution of the Board - The board will comprise of 3 members and**
will have a retired High Court Judge acting as its Chairperson and two other
members who shall be experts in the field of either infrastructure of finance or
banking or law.

**34. Head Quarters - The Board will have its permanent Head Quarters at**
Hyderabad and the Board shall meet under the Chairpersonship of the
Chairperson.

**35. Term of Office of the members - Every member of the Board shall hold**
office for the term of 3 years from the date of appointment. The State
Government shall be entitled to reappoint any member or members for one
more term of 3 years.

**36.** **Terms and conditions of appointment - The Terms and conditions of**
appointment, remuneration and perquisites of the members shall be such as
may be prescribed by the Government.

**37.** **Functions of the Board - The Functions of the Board shall be as**
follows,(a) To assist the Government Agency, or Local Authority and any
Developer in an independent and impartial manner to reach an amicable
settlement of their disputes arising under the Act or the Concession
Agreement;

1. For the words ‘Infrastructure Authority’ the word ‘Government’ shall be substituted in Sec.30, by Act 3 of 2017,
Sec.12.


-----

(b) The Board shall be guided by principles of objectivity, fairness,
obligations of the parties, the usages of the trade and the circumstances
governing the disputes including the good business practice prevalent in the
national and internation field covered by the dispute between the parties;

(c) The Board may conduct the conciliation proceedings in such a
manner as it may consider appropriate, taking into account the circumstances
of the case the wishes of the parties that may be expressed and for reaching a
speedy settlement of the dispute;

(d)  The Board may, at any stage of the conciliation proceedings, make
proposals for settlement of dispute. Such proposal need not be in writing and
need not be accompanied by any statement of reasons therefor.

**38.** **Administrative assistance - In order to facilitate the conduct of the**
conciliation proceedings, the Board with the consent of the parties, may
arrange for administrative assistance by suitable institution or person.

**39. Powers of the Board – The board shall have the same powers as are**
vested in a Civil Court under the Code of Civil Procedure, 1908 (Central Act 5
of 1908) while dealing with the conciliation proceedings in respect of the
following matters, namely:
(i) The summoning and enforcing the attendance of any party or witness
and examining the witness on oath;

(ii) The discovery and production of any document or other material as
evidence;

(iii)  The reception of evidence on oath;

(iv)  the requisitioning of the report of any body or any analysis or
decision from the appropriate forum or laboratory or other relevant
sources;

(v) The issuing of any commission for examining any witness;

(vi) The power to regulate its own procedure and prescribe rules; and

(vii) any other matter, which may be prescribed.

**40.** **Judicial Proceeding - Every proceeding before the Board shall be**
deemed to be a judicial proceeding within the meaning of section 193 and
section 228 of the Indian Penal Code, 1860 (Central Act 45 of 1860) and the
Board shall be deemed to be a Civil Court for the purpose of section 195 and
Chapter XIV of the Code of Criminal Procedure, 1973 (Central Act 2 of 1974).

**CHAPTER - VI**
**CONCILIATION PROCEEDINGS**

**41.Application and Scope - Any dispute, claim, or difference arising out of or**
in connection with or in relation to any Concession Agreement or contract
between the Government Agency or Local Authority on the one hand and the
Developer on the other hand, shall as far as possible, be amicably settled
between the parties. In the event of any dispute, claim or difference not being
amicably resolved, such dispute, claim or difference shall be referred to the
Conciliation board.

**42. Commencement of conciliation proceedings - (1) The party initiating**
conciliation shall send to the other party a written invitation to conciliate under


-----

this part, briefly indentifying the subject matter of the dispute, claim and/or
difference. The party initiating conciliation shall file the invitation with the
Board in such Form as may be prescribed.

(2) The conciliation proceedings shall commence when the other party
receives the written invitation from the party initiating conciliation.

(3) If the other party does not reply or does not participate in the
conciliation proceedings, then the Board shall have power to call upon the
other party to file its reply or give notice to the other party and proceed further
without reply.

(4) The Board may request each party to submit to it further written
statement of their position and the facts and grounds in support thereof,
supplemented by any document and other evidence as such party deems
appropriate. The parties shall send a copy of such statement, documents and
other evidence to the other party.

**43. The Board and certain Enactments - The provisions of section 66 of the**
Arbitration and Conciliation Act, 1996 (Central Act 26 of 1996) shall apply to
the Board as regards the Code of Civil Procedure, 1908 (Central Act 5 of 1908)
and the Indian Evidence Act, 1872 (Central Act 1 of 1872).

**44. Co-operation of the parties with the Board - The parties shall Co-operate**
with the Board and in particular, shall comply with requests by the Board to
submit written materials, give evidence and attend meetings.

**45. Suggestions by parties for settlement of dispute - Each party may on**
his own initiative or at the invitation of the Board, submit to the Board
suggestions for the settlement of the dispute.

**46. Settlement agreement - (1) When it appears to the Board that there exists**
a possibility of a settlement, the terms and conditions of which may be
acceptable to the parties, the Board shall formulate the terms and conditions of
the possible settlement and submit the same to the parties for their
observations. After receiving the observations of the parties, if any, the Board
may reformulate the terms and conditions of the possible settlement.

(2) If the parties reach agreement on a settlement of the dispute, they
may draw up and sign a written settlement agreement. If requested by the
parties, the Board may draw up or assist the parties in drawing up the
settlement agreement.

(3) When the parties sign the settlement agreement, it shall be final and
binding on the parties and persons claiming under them respectively.

(4) The board shall authenticate the settlement agreement and furnish a
copy thereof to each of the parties.

**47. Status and effect of settlement agreement - The settlement agreement**
shall have the same status and effect as if it is an arbitral award on agreed
terms on the substance of the dispute rendered by an Arbitral Tribunal under
section 30 of the Arbitration and Conciliation Act, 1996 (Central Act 26 of
1996) or its amendment or re-enactment as the case may be.

**48. Termination of conciliation proceedings - The conciliation proceedings**
shall be terminated, 
(a) by the signing of the settlement agreement by the parties, on
the date of the agreement; or


-----

(b) by an order of the Board, after consultation with the parties, to
the effect that further efforts at conciliation are no longer justified, on
the date of the order; or

(c) by a written communication of the parties jointly addressed to
the Board to the effect that the conciliation proceedings are terminated
on the date of the communication; or

(d) on the expiry of the period of 3 months from the date of the
commencement of the conciliation proceedings, if the parties to
conciliation proceedings request in writing to continue conciliation, such
conciliation proceedings shall stand terminated on the expiry of period of
90 days from the date of such joint communication in writing to the
Board requesting the Board to continue conciliation.

**49. Resort to Arbitral or Judicial Proceedings - (1) The parties shall not**
initiate during the conciliation proceedings any arbitral or judicial proceedings
in respect of any dispute, claim or difference i.e. the subject matter of the
conciliation proceedings.

(2) Notwithstanding the provisions of sub-section (1) herein the party
may initiate arbitral or judicial proceedings, where, in his opinion, such
proceedings are necessary for preserving his rights during the conciliation
proceedings.

**50. Commencement of arbitral or judicial proceedings - No party shall**
commence any arbitral or judicial proceedings in respect of any dispute, claim
or difference arising out of or in connection with or in relation to any contract
or concession agreement, without first initiating the conciliation proceedings
and commencing the conciliation proceedings by sending to other party a
written invitation to conciliate and filing the same with the Board.

**51. Costs - (1) Upon termination of the conciliation proceedings the Board**
shall fix the costs of the conciliation and give written notice thereof to the
parties.

(2) For the purpose of sub-section (1) “costs” means reasonable costs
relating to,
(a) the fees of the Board as may be prescribed and expenses of the
Board and witnesses requested by the Board with the consent of the
parties;

(b) any expert advice requested by the Board with the Consent of
the parties;

(c) any assistance provided by the Conciliation Board;

(d) any other expenses incurred in connection with the conciliation
proceedings and the settlement agreement.

(3) The costs shall be borne equally by the parties unless the Settlement
Agreement provides for a different apportionment.  All other expenses incurred
by a party shall be borne by that party.

**52. (1) The Board may direct each party to deposit an equal amount as an**
advance for the costs referred to in sub-section (2) of section 51, which the
Board expects, will be incurred.


-----

(2) During the course of the conciliation proceedings, the Board may
direct supplementary deposits in an equal amount from each party.

(3)  If the required deposits under sub-sections (1) and (2) are not paid
in full by the parties within thirty days of the direction, the Board may suspend
the proceedings or may take a written order of termination of the proceedings
to the parties, effective on the date of that order.

(4) Upon termination of the conciliation proceedings, the board shall
render an account to the parties of the deposits received and shall return any
unexpended balance to the parties.

**53.** **Admissibility of evidence in other proceedings – The provisions of**
section 81 of the Arbitration and conciliation Act, 1996 (Central Act. No. 26 of
1996) shall apply to the matters before the Board relating to admissibility of
evidence in other proceedings.

**CHAPTER- VII**

**INFRASTRUCTURE PROJECTS FUND**

**54.** **Establishment of the Fund - The Government shall establish a fund to**
be called the “Infrastructure Projects Fund” and shall contribute a sum of
Rs.100 lakhs to the fund. The Government will make such further
contributions to the fund as it may deem appropriate from time to time.

**55. Fees and charges to be credited to the fund - The Government Agency or**
the Local Authority will interalia levy fees and charges on the application for
projects and project fee on the developer under the Concession Agreement as
may be prescribed from time to time and which fees shall be credited to the
fund.

**56.** [1][* - - - *]
**57.** [1][* - - - *]
**58.** [1] [* - - - *]
**59.** [1] [* - - - *]

**60.** [1] [* - - - *]

**CHAPTER VIII**
**MISCELLANEOUS**

**61. Control by Government - (1) The Infrastructure Authority shall exercise**
its powers, and perform its functioning under the Act in accordance with the
policy framed and guidelines laid down from time to time, by the Government
and it shall be bound to comply with such directions, which may be issued,
from time to time, by the Government for efficient administration and effective
implementation of the Act.

(2) If, in connection with the exercise of the powers and the performance
of the functions of the Infrastructure Authority under the Act, any dispute
arises between the Infrastructure Authority and the Government, the
Government shall decide the matter and the Government’s decision shall be
final.
**62.** 2[*     * - - *]

1 . sections 56, 57, 58, 59 and 60 omitted by Act 3 of 2017, Sec.13.

2 . sec.62 omitted by Act 3 of 2017, Sec.13.


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**63.** **Abuser Charges – (1) The** [1][Government] shall be entitled to levy abuser
charges for abuse, on the Developer, if any Developer abuses the rights granted
to the Developer under the Concession Agreement.

Provided [1][Government] shall give an opportunity of not less than
fifteen days from the date of service of a notice to the Developer to show cause
in writing, why such abuser charges should not be levied on him, before
passing the order under this section.

(2) The Concession Agreement will provide what will constitute abuse
of rights granted to the Developer. The abuser charges will be as prescribed by
the [1][Government] from time to time.

Provided that the abuser charges levied under this section shall be
final and conclusive subject to provisions of section 66 of the Act.

**64.** **Polluter charges - (1) The** [1][Government] shall be entitled to levy polluter
charges for pollution of the environment on the Developer, if the Developer
pollutes the environment and / or does not adhere to the specified mitigation
measures as provided in the Concession Agreement.

(2) The [1][Government] shall give an opportunity of not less than fifteen
days from the date of service of notice to the Developer to show cause, in
writing, why such Polluter Charges should not be levied on the Developer,
before passing the order under this section.

(3) The Polluter Charges will be as prescribed by the [1][Government].

Provided that the Polluter Charges levied under this section shall be final
and conclusive subject to provisions of section 66 of the Act.

**65.** [2][* - - - *]

**66. Indemnity by the Developer - The Developer shall be bound to indemnify**
the Government Agency or the Local Authority against any defect in design,
construction, maintenance and operation of the Project and shall undertake to
reimburse all costs, charges, expenses, losses and damages in that behalf.

**67. Recovery of costs, charges, dues, fees and fines - The Infrastructure**
Authority or the Government Agency or the Local Authority or the Conciliation
Board shall be entitled to recover all sums due to it under the Act, whether by
way of costs, charges, dues, fees or fines, in accordance with the provisions of
the Andhra Pradesh Revenue Recovery Act, 1864 (Act No. II of 1864) as if any
such sum may be recovered in the same manner as arrear of land revenue
under the provisions of the said Act and remit the same to the Infrastructure
Projects Fund as it may direct.

**68.** **Application of fines and charges  - The Infrastructure Authority or the**
Government Agency or the Local Authority or the conciliation Board imposing
the costs, charges, fees and fine under the Act may direct that the whole or any
part thereof shall be applicable towards payment of the costs of the
proceedings.

**69.** **Penalties - (1) Whoever fails or omits to comply with or contravenes any**
of the provisions of the Act [3][*     * - - *] shall be

1 . For the words ‘Infrastructure Authority’ the word ‘Government’ shall be substituted in Sec.63 & Sec.64, by Act 3
of 2017, Sec.14.

2 . Sec.65 omitted by Act 3 of 2017, Sec.15.
3. In Sec.69 the words ‘or order or direction of the Infrastructure Authority’ shall be omitted by Act 3 of 2017,
Sec.16.


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liable for each of such failure or omission or contravention for fine which shall
not be less than Rs.50,000/- (Rupees Fifty Thousand) but which may extend
upto Rs.1,00,00,000/- (Rupees One Crore) or shall be punishable with
imprisonment for a term which shall not be less than one month but which
may extend to three years or with both.

(2) whoever fails or omits to comply with or contravenes any of the
provisions of the Act or order or directions of the Board shall be liable for each
of such failure or omission or contravention for fine which shall not be less
than Rs.50,000/- (Rupees Fifty Thousand) but which may extend upto
Rs.1,00,00,000/- (Rupees One Crore) or shall be punishable with
imprisonment for a term which shall not be less than one month but which
may extend to two years or with both.

**70.** **Offences by Companies – (1) Where an offence under the Act has been**
committed by a company, every person who at the time when the offence was
committed, was in charge of, and was responsible to the company for the
conduct of the business of the company, as well as the company, shall be
deemed to be guilty of the offence and shall be liable to be proceeded against
and punished accordingly.

Provided that nothing contained in this sub-section shall render any
such person liable to any punishment if he proves that the offence was
committed without his knowledge or that he had exercised all due diligence to
prevent the commission of such an offence.

(2) Notwithstanding anything contained in sub-section (1), wherein an
offence under this Act, has been committed by a company and it is proved that
the offence has been committed with the consent or connivance of, or is
attributable to any neglect on the part of, any director, manager, secretary or
other officer of the company, such director, manager, Secretary or other officer
shall be deemed to be guilty of that offence and shall be liable to be proceeded
against and punished accordingly.

For the purposes of this section,
(a) “Company” means a body corporate and includes a firm or other
association of individuals; and
(b) “Director” in relation to a firm, means a partner in the firm.

**71.** **Power to compound offences – The Infrastructure Authority and the**
Conciliation Board may for the reasons to be recorded in writing either before
or after the institution of proceedings compound any offence relating to
contravention of any provisions of the Act or order made by it.

**72.** **Cognizance of offences – (1) No Court shall take cognizance of any**
offence punishable under the Act, except upon a complaint in writing made by
an officer of the Infrastructure Authority or the Conciliation Board generally or
specially authorised in this behalf by the Infrastructure Authority or
Conciliation Board as the case may be and no Court other than the
Metropolitan Magistrate or a Judicial Magistrate of First Class or a Court
superior thereto shall try any such offence.

(2) The court may, if it sees reasons so to do dispense with the personal
attendance of the officer of the Infrastructure Authority or the Conciliation
Board filing the complaint.
**73. Penalties and proceedings not to prejudice other actions –** The
proceedings and actions under this Act against a person contravening the
provisions of the Act of orders passed by the Infrastructure Authority or the


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Conciliation Board shall be in addition to and without prejudice to actions that
may be initiated under other Acts.

**74. Protection of action taken in good faith - No suit, claim or other legal**
proceedings shall lie against the Infrastructure Authority or Conciliation Board
or the Chairman or other members of the Infrastructure Authority or
Conciliation Board or the staff or representatives of the Infrastructure
Authority or Conciliation Board in respect of anything which is in good faith
done or intended to be done under the Act or any rules or regulations or
orders made there under.

**75. Members and staff of Infrastructure Authority or Conciliation Board to**
**be Public Servants - The Chairman, other members and officers and other**
employees of the Infrastructure Authority or Conciliation Board Appointed for
carrying out the objects and purposes of the Act, shall be deemed to be public
servants within the meaning of section 21 of the Indian Penal Code, 1860
(Central Act 45 of 1860).

**76. Bar of Jurisdiction - Any order or proceedings under the Act including**
but not limiting to any notification of a Project as Infrastructure Project
categorisation or prioritisation of Projects, Concession Agreement, bid process,
selection of Developer, modification of any proposal, sanction of any proposal,
implementation and execution of any Project, actions of Infrastructure
Authority, Actions of the Government or the Government Agency or the Local
Authority, actions of the Board, grievance or objection of any party or person or
group inrespect of any Infrastructure Project, validity, legality, efficacy of any
action or decision in respect of any Infrastructure Project of Infrastructure
Authority or the Government or the Board, dispute settlement or dispute
resolution in rested of any matters under the Act shall be heard only by High
Court and by no other court or courts subordinate to the High Court.

**77. Power to remove difficulties – (1) If any difficulty arises in giving effect to**
the provisions of the Act or the rules, regulations, scheme or orders made
hereunder, the State Government may by order published in the Official
Gazette, makes such provision, not inconsistent with the provisions of the Act
as appears to it to be necessary or expedient for removing the difficulty.

(2) All orders made under sub-section (1) shall, as soon as may be after
they are made, be placed on the Table of the Legislative Assembly of the State
and shall be subject to such modification by way of amendments or repeal as
the Legislative Assembly may make either in the same session or in the next
session.

**78.** [1][* - - - *]

**79. Power to make rules - (1) The Government may, by notification, make**
rules for carrying out all or any of the purposes of this Act.

(2) Every rule made under this Act shall, immediately after it is made, be
laid before the Legislative Assembly of the State if it is in session, and if it is
not in session, in the session immediately following for a total period of
fourteen days which may be comprised in one session or in two successive
sessions, and if, before the expiration of the session in which it is so laid or the
session immediately following the Legislative Assembly agrees in making any
modifications in the rule or in the annulment of the rule, the rule shall from
the date on which the modification or the annulment is notified, have effect
only in such modified form or shall stand annulled as the case may be, so

1. Sec.78 omitted by Act 3 of 2017, Sec.17.


-----

however, that any such modification or annulment shall be without prejudice
to the validity of anything previously done under that rule.

**80. Delegation of Powers - The Government may by notification, direct that**
any power exercisable by the Government under the Act shall be exercisable by
an officer of the Government, subject to such terms as may be specified in such
notification.

**81. Act to override other State Laws – If any provision contained in any State**
Act is repugnant to any provision contained in the Act, the provision contained
in the Act shall prevail and the provision contained in any such State Act shall
to the extent of repugnancy be void.

**82. Repeal of Ordinance 4 of 2001 - The Andhra Pradesh Infrastructure**
Development Enabling Ordinance, 2001 is hereby repealed.

1[84. Transitional Provision – On and from the date of commencement of the
Andhra Pradesh Infrastructure Development Enabling (Amendment) Act, 2017,
all or any proceedings or proceeding concerned to any project if any pending
before the Infrastructure Authority shall be transferred to and dealt with by the
State Government as per the provisions of the Principal Act as amended by the
said Act.]

1. Sec.84 added by Act 3 of 2017, Sec.18.


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**SCHEDULE- I**

**[See Section 2 (h)]**

The following Concession Agreement or arrangements with their
variations and combinations may be arrived at by the Government Agency or
the Local Authority for undertaking Infrastructure Projects. The arrangements
enumerated hereinafter are indicative in nature and the Government Agency or
the Local Authority shall be entitled to evolve and arrive at such Concession
Agreement or arrangement incorporating any of the arrangements enumerated
hereinafter or any other arrangements as may be found necessary or expedient
for any specific Project.

**(i) Build – and Transfer (BT) - A contractual arrangement whereby the**
Developer undertakes the financing and construction of a given infrastructure
or development facility and after its completion hands it over to the
Government, Government Agency or the Local Authority. The Government,
Government Agency or the Local Authority would reimburse the total Project
investment, on the basis of an agreed schedule. This arrangement may be
employed in the construction of any infrastructure or development Projects
including critical facilities, which for security or strategic reasons, must be
operated directly by the Government or Government Agency or the Local
Authority.

**(ii) Build-Lease – and – Transfer (BLT) - A contractual arrangement**
whereby a Developer undertakes to finance and construct Infrastructure
Project and upon its completion hands its over to the Government or
Government Agency or the Local Authority concerned on a lease arrangement
for a fixed period, after which ownership of the facility is automatically
transferred to the Government or Government Agency or the Local Authority
concerned.
**(iii) Build-operate-and-Transfer (BOT) – A contractual arrangement**
whereby the Developer undertakes the construction, including financing, of a
given infrastructure facility, and the operation and maintenance thereof. The
Developer operates the facility over a fixed term during which lie is allowed to
a charge facility users appropriate tolls, fees, rentals and charges not
exceeding those proposed in the bid or as negotiated and incorporated in the
contract to enable the recovery of investment in the Project. The Developer
transfers the facility to the Government or Government Agency or the Local
Authority concerned at the end of the fixed terms that shall be specified in the
Concession Agreement. This shall include a supply- and – operate situation
which is a contractual arrangement whereby the supplier of equipment and
machinery for a given infrastructure facility, if the interest of the Government,
Government Agency or the Local Authority so requires, operates the facility
providing in the process technology transfer and training to Government,
Government Agency or the Local Authority nominated individuals.

**(iv) Build – Own – and –Operate (BOO) - A Contractual Agreement**
whereby a developer is authorised to finance, construct, own, operate and
maintain an infrastructure or development facility from which the Developer is
allowed to recover his total investment by collecting user levies from facility
users. Under this project, the Developer owns the assets of the facility and
may choose to assign its operation and maintenance to a facility operator. The
transfer of the facility to the Government, Government Agency or Local
Authority is not envisaged in this structure, however the Government,
Government Agency or Local Authority may terminate its obligations after
specified time period.

**(v) Build- Own- Operate – Transfer (BOOT) – A Contractual Agreement**
whereby a developer is authorised to finance, construct, maintain and operate
a project and whereby such Projects is to vest in the Developer for a specified
period. During the operation period, the Developer will be permitted to charge


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user levies specified in the Concession Agreement, to recover the investment
made in the Project. The Developer is liable to transfer the project to the
Government, Government Agency, or the Local Authority after the expiry of the
specified period of operation.

**(vi) Build- Transfer – and Operate (BTO) - A Contractual arrangement**
whereby the Government or Government Agency or the Local Authority
contracts out an infrastructure facility to a Developer to construct the facility
on a turn-key basis assuming cost overruns, delays and specified performance
risks. Once the facility is commissioned satisfactorily, the Developer is given
the right to operate the facility and collect user levies under a Concession
Agreement. The title of the facilities always vests with the Government,
Government Agency or the Local Authority in this arrangement.

**(vii) Contract** **–** **Add** **and** **operate** **(CAO)-** The Contractual
arrangement whereby the Developer adds to an existing infrastructure facility
which it rents from the Government, Government Agency or the Local Authority
and operates the expanded project and collects user levies, to recover the
investment over an agreed franchise period. There may or may not be a
transfer arrangement with regard to the added facility provided by the
Developer.

**(viii) Develop – operate and Transfer (DOT) –** A Contractual
arrangement whereby favourable conditions external to a new Infrastructure
Project which is to be build by a Developer are integrated in the BOT
arrangement by giving that entity the right to develop adjoining property and
thus, enjoy some of the benefits the investment creates such as higher property
or rent values.

**(ix)** **Rehabilitate – Operate and Transfer (ROT) - A Contractual**
arrangement whereby an existing facility is handed over the private sector to
refurbish, operate (collect user levies in operation period to recover the
investment) and maintain for a franchise period at the expiry of which the
facility is turned over to the Government or Government Agency or the Local
Authority. The term is also used to describe the purchase of an existing facility
from abroad, importing, refurbishing, erecting and consuming it within the
host county.

**(x) Rehabilitate – Own and Operate (ROO) – A Contractual arrangement**
whereby an existing facility is handed over to the operator to refurbish and
operate with no time limitation imposed on ownership. As long as the operator
is not in violation of its franchise, it can continue to operate the facility and
collect user levies in perpetuity.


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**SCHEDULE – II**

**[See Section 2 (e) ]**

**CATEGORIES OR PROJECTS**

All Infrastructure Projects may be categorized based on the extent of
Government support required and the exclusivity of the rights granted. The
Government Agency or the Local Authority with the approval of the
Infrastructure Authority will be entitled to evolve any further category or
categories of the Project having combination of categories as per the priority
and other requirements of the Government Agency or the Local Authority. The
Government Agency or the Local Authority with the approval of the
Infrastructure Authority may divide the Projects into following categories:

**1.CATEGORY – I PROJECTS: Shall be Projects where:-**

(i) No fiscal incentives in the form of contingent liabilities or
financial incentives are required;

(ii) the Project is viable even when land is granted at the market
rates;

(iii) no exclusive rights are conferred on the Developer;

(iv) minimum inter-linkages are required.

**2. CATEGORY – II PROJECTS: Shall be Projects where,-**

(i) Government or Government Agency will be required to provide
asset support;

(ii) financial incentives in the form of contingent liabilties or direct
financial support are required to be provided;

(iii) exclusive rights are conferred on the Developer;

(iv) extensive linkages i.e. support facilities for the project such as
water connection etc., are needed.


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**SCHEDULE – III**

[See Section 2 (nn)]
**SECTORS**

1. Roads (State Highways, Major District Roads, Other District
Roads & Village Roads), Bridges and Bypasses

2. Health

3. Land reclamation

4. Canals, Dams

5.Water Supply, treatment and distribution

6. Waste management

7. Sewerage, drainage

8. Public Markets

9. Trade Fair, Convention, Exhibitiion and Cultural Centres

10. Public Buildings

11. Inland Water Transport

12. Gas and Gas Works

13. Sports and recreation Infrastructure, Public Gardens and Parks

14. Real Estate

15 Any other Projects or sectors as may be notified by the
Government


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**SCHEDULE IV**

[See Section 2 (1)]

**GENERIC RISKS**

The Government Agency or the Local Authority will endeavour to
disclose, allocate and provide for the treatment of the following risks in the
Concession Agreement as may be applicable to a Project:

**I. Construction Period Risks:**

(i) Land Expropriation
(ii) Cost Overruns
(iii) Increase in Financing Cost
(iv) Time & Quality Risk
(v) Contractor Default
(vi) Default by the Developer
(vii)Time, Cost & Scope of identified but related Work, and variations
(viii) Environmental Damage – Subsisting / On going.

**II. Operation Period Risks:**

(i) Government Agency Default
(ii) Developer Default
(iii)Termination of Concession Agreement by Infrastructure
Authority or Government or Government Agency.
(iv) Environmental Damage-Ongoing
(v) Labour Risk
(vi) Technology Risk.

**III. Market a Revenue Risks:**

(i) Insufficient Income from user Levies
(ii) Insufficient Demand for Facility

**IV. Finance Risks:**
(i) Inflation
(ii) Interest Rate
(iii) Currency Risk

**V. Legal Risk:**

(i) Changes in Law
(ii) Title/Lease rights
(iii) Security structure
(iv) Insolvency of Developer
(v) Breach of Financing Documents

**VI. Miscellaneous Risks:**
(i) Direct Political Force Majeure
(ii) In-direct Political Force Majeure
(iii) Natural Force Majeure
(iv) Sequestration
(v) Exclusivity
(vi) Development Approvals
(vii) Adverse Government Action/In Action
(viii) Provision of Utilities
(ix)  Increase in Taxes
(x) Termination of Concession by the Government
(xi) Payment Failure by the Government


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**SCHEDULE – V**

[See Section 2 (rr)]

**STATE SUPPORT**
The Government will consider the grant of following forms of State
Support, ranked in its order of preferences i.e.,:

(i) Administrative Support
(ii) Asset Support
(iii) Foregoing Revenue Streams
(iv) Guarantees for contingent liabilities; and
(v) Financial Support

**I. Administrative Support:**

(i) The State Government will offer the following administrative
support to all the Projects covered under the Act, namely:
(a) Provide State level statutory clearances within specified
time limits after the Project is sanctioned in favour of the
Developer.

(b) Automatically grant non-statutory State level clearances,
if a Project meets specifications as may be prescribed.

(c) Provide Best Effort support for obtaining all central level
clearances.

(d) Undertake all rehabilitation & resettlement activities and
recover the cost from Developer.

(e) Provide construction power and water at Project site.

(f) Acquire land necessary for the Project, if the same does
not already belong to the Government.

**II. Asset Based Support:**
(i) The State Government will offer asset based support to all
Category II Projects covered under the Act. The Category I Projects
will receive asset based support only if the sector policy specifically
provides for the same. The asset based support comprises.
1[(a) Government owned land would be provided at
concessional rates or otherwise for projects either,(i) On a lease hold basis where ownership would revert to
the Government within a maximum period of 99 years
from the date of grant of lease, or
(ii) On free hold basis]
(b) The State Government will commit/facilitate
development of linkage Infrastructure for Projects.

**III. Foregoing Revenue Streams:**

(i) The Government will forego revenue streams in case of all
Category II Projects Government will forego revenue streams in
case of Category I Projects only if the sector policy specifically
provides for the same. Such support would be in the form of;
1. Substituted by Act 1 of 2016, Sec.4.


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(a) Exemption of sales tax on all inputs required for Project
construction.

(b) Exemption of stamp duty and registration fees on the first
transfer of land, from the Government to the Developer and on
Project agreements registered in the State.

(c) Exemption from payment of seginiorage fees i.e., cess on
minor minerals during construction period.

**IV. Guarantees:**
(i) The Government may guarantee receivables only in the
case of Category II Projects, provided they are not collected directly
from users.

(ii) The Government may also provide off take guarantees if it
is the service distributor and is responsible for collection of user
levies.

**V. Financial Support:**
(i) Direct financial support may be considered only in the case
of Category II Projects.

(ii) The Government will have the final authority to approve
direct financial support.

(iii) Infrastructure Authority will ensure that appropriate
Project structuring will eliminate, to the extent possible, the need
for financial support.

(iv) Extent of financial support will be used as one of the
selection criteria whenever financial support is to be provided.


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