SPVs formed by pvt parties for execution of PPP projects not subject to govt audit

  • IANS
  • Economy News
SPVs formed by pvt parties for execution of PPP projects not subject to govt audit
Credit: © Reuters.

New Delhi, March 21 (IANS) The Special Purpose Vehicles (SPVs) formed by private parties for the execution of Public-Private Partnership (PPP) projects are not subject to government audit.

Minister of State of Finance, Pankaj Chaudhary, said this in a written reply to the Lok Sabha to a question -- "Whether government has proposed to get an audit conducted by the Comptroller and Auditor General of India of the expenditure of private companies in PPP projects".

The reply said that the joint ventures (JVs) incorporated under the Companies Act, 1956/2013, in which government or a government company in combination with other companies or corporations holds less than 51 per cent of the paid up capital of the concerned JV company or subsidiaries of PSU, incorporated outside India, are not subject to audit by the C&AG within the framework of C&AGs (DPC) Act, 1971 or the Companies Act, 1956/2013.

The PPP projects, through audit of contracting authority are audited by the Comptroller & Auditor General (C&AG).

The C&AG can audit the process of selection of the private partners by the public authority, the agreements entered for PPP projects and implementation thereof, said the reply.

The minister informed that award of PPP projects by the government, expenditure by the government for PPP projects and monitoring of projects by the government are subject to government audit.

"However, the SPVs formed by the private parties for the execution of PPP projects are not subject to government audit. The audit of SPVs is conducted by statutory auditors as per the Income Tax Act or Companies Act, and they are appointed in consultation with the sponsoring or implementing authorities.

"The genuineness of the cost escalation of PPP projects are usually undertaken by the independent engineer appointed by the SPV in consultation with the sponsoring authority. In PPP projects, cost escalation, if any, is borne by the concessionaire/private entity of the project," added the reply.

The Comptroller & Auditor General's (Duties, Powers & Conditions of Service) Act, 1971 provides for audit of all expenditures from the Consolidated Fund of India; transactions of the Union and the states relating to contingency funds and public accounts; as well as trading, manufacture, profit and loss accounts and balance sheets of any department of the Union or of a state.

--IANS

kvm/arm

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100

Related Articles