Home » CCEA clears proposal to cap annuity allocation for PPP projects

CCEA clears proposal to cap annuity allocation for PPP projects

CCEA clears proposal to cap annuity allocation for PPP projects
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The Cabinet Committee on Economic Affairs has approved the recommendations made by the Inter-Ministerial Task Force under the chairmanship of Member (BK Chaturvedi), Planning Commission on budgetary ceilings for annuity commitments under Public Private Partnership (PPP) projects across sectors.

The recommendation of the committee would ensure that future budgetary options do not get restricted due to annuity payments for PPP projects.

The guidelines would be communicated to Ministries for adoption within two weeks, a government press release said. These guidelines will streamline the process of structuring and sanction of projects under annuity mode of PPP.

Following the approval, government can set a timeline till which future budgetary options can be foreclosed for making payment to the concessionaire for financing, construction, operation and maintenance of a PPP project.

The government is of the view that annuity payments under PPP projects create a burden on future budgets for a long period of time, making future budgets become inflexible and committed.

Annuity payments are essentially in the nature of deferred budgetary payments as they are typically borne by the government out of the annual budgetary allocations spread over time.

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