USHERING A NEW WAVE OF REFORMS IN PUBLIC PROCUREMENT AND PROJECT MANAGEMENT

INTRODUCTION

Cost and time overruns have long since plagued India’s infrastructure sector and given a bad name to public projects being executed in the country. According to a report[1] published by the Ministry of Statistics and Programme Implementation, as on November 1, 2021, 438 out of 1,681 central sector infrastructure projects have been affected by cost overruns, aggregating to Rs 4.34 lakh crore, and 539 projects are running behind their respective schedules. Such delays take a toll on the viability of projects. To mitigate this problem, the Central Vigilance Commission (“CVC”), Comptroller and Auditor General of India and NITI Aayog have long-advocated the need to revamp the procurement and project management procedures in India. The efforts of these premier institutions have culminated in the Ministry of Finance issuing the General Instructions on Procurement and Project Management on October 29, 2021 (“General Instructions”). By introducing provisions pertaining to additional methods of procurement, timely payment to contractors and reforms in the dispute resolution process, the General Instructions attempt to overhaul the manner in which projects are awarded and implemented by public authorities and project executing agencies (“PEA”).
Continue Reading Ushering a New Wave of Reforms in Public Procurement and Project Management

Overhaul of the ARC Framework – Need of the hour

In continuance of various measures to resolve the pile of non-performing assets (NPAs) in the financial sector, the Reserve Bank of India (RBI) has now turned its focus on the role and framework of Asset Reconstruction Companies (ARCs) in being an important part of the solution. Even though the ARCs were in the game since enactment of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI”), their performance has been sub-optimal and the recovery percentage abysmally low.[1]


Continue Reading Overhaul of the ARC Framework – Need of the hour

Aircraft Leasing in IFSC

In our previous post we had provided a synopsis of the legal framework relating to aircraft leasing in India and Indian IFSCs. In this piece, we will provide an overview of the tax incentives offered to the aircraft leasing activities undertaken from  IFSCs located in India to achieve the dream of developing the GIFT IFSC into a global aircraft leasing hub. We have provided  a few more thoughts to ponder upon as India fuels its engines to realise its objective of ‘letting the common citizen of the country fly’ (Ude Desh Ka Aam Nagrik).


Continue Reading Part III (B): Aircraft Leasing in IFSC – Let’s kick the tires and light the fires!

Aircraft Leasing in IFSC

The Government of India (“GOI”) has, in the recent years, realised the importance of aircraft leasing activities in the global market and has made its intentions clear to promote aircraft leasing and financing activities in India’s first International Financial Services Centre (“IFSC”) situated in GIFT City, Gandhinagar. The aim is to bring the aircraft leasing business,  currently being carried out in countries that have established themselves in this sector such as Ireland, USA, Hong Kong, Singapore, etc[1], to the Indian shores. Leasing aircraft from abroad leads to incurring substantial liabilities payable in foreign currencies. Hedging currency fluctuations also becomes an additional cost for Indian airline operating companies. The above reasons highlight cost-inefficiencies and put into perspective how crucial it is to begin aircraft leasing and financing activities in India.


Continue Reading Part III (A): Aircraft Leasing in IFSC – Let’s kick the tires and light the fires!

National Monetisation Pipeline – Fueling Economic Growth

INTRODUCTION

Monetisation of assets has  been  identified as one of the pillars for enhanced and sustainable infrastructure financing. The Finance Minister of India (“FM”) had, in December 2019, announced a National Infrastructure Pipeline (“NIP”) that envisages an investment of INR 111 lakh crore in the infrastructure sector in the period between 2019 and 2025 and brings in various opportunities for private sector to invest in infrastructure projects including the development and operation of the same. The FM in the annual budget 2021-2022 announced the launch of a new national monetisation pipeline[1] to bridge the gaps in infrastructure funding projects under the NIP and to unlock value from the current public investment in infrastructure through private sector efficiencies in operations and management of infrastructure. The NITI Aayog has now created the National Monetisation Pipeline (NMP Volumes I & II) (“NMP”) in respect of the brownfield core infrastructure assets. The NMP is in furtherance of the Government of India’s (“Government”) strategic divestment policy, which aims to limit Government’s presence to only a select identified sectors with the rest to be handed to private players.


Continue Reading National Monetisation Pipeline – Fueling Economic Growth

Flight and Fall Transmitting Power: Judicial Initiative to Retain Ecological Balance in Society

The renewable energy sector, while promising an environment friendly production of clean electricity, has posed a threat to the environment in certain situations. Recently, a public interest litigation before the Supreme Court, brought forward one such environmental hazard posed by the sector. The overhead transmission lines installed around solar and wind power projects (“Projects”) are posing an extinction risk to endangered birds (such as (i) the Great Indian Bustard (GIB); and (ii) the Lesser Florican).


Continue Reading Flight and Fall Transmitting Power: Judicial Initiative to Retain Ecological Balance in Society

A transition away from LIBOR – What it means for ECB lending in India

LIBOR may be the most popular acronym in the international financial markets, and rightfully so. It has for decades been the benchmark rate adopted worldwide for financial transactions ranging from loans, bonds and derivatives. Often touted as the ‘world’s most important number[1], it first made its appearance in 1969 and has since then established itself as the go to reference rate for all things money.
Continue Reading A transition away from LIBOR – What it means for ECB lending in India

NeSL - THE NEW WAY OF ELECTRONIC EXECUTION

 INTRODUCTION

Execution of a document means the placement of signatures by all persons who are required by the character of the instrument to sign the same in order to give it a binding effect under law. It is based on the classic principle of consensus ad idem i.e. two parties entering a contract should agree upon the same thing in the same sense. One amongst the many problems for closure of transactions posed by COVID-19 is the mechanism of execution of documents. The traditional way of executing agreements involved the parties to be physically present at a place and affix the signatures, stamps, common seals, etc., along with paying the necessary stamp duty as prescribed under the relevant stamp laws. However, with the imposition of a nationwide lockdown, travel restrictions and norms of social distancing in place, the manner of execution of documents has had to be reimagined.
Continue Reading NeSL: THE NEW WAY OF ELECTRONIC EXECUTION

Housing Finance Companies - Proposed changes by RBI

The Central Government had, with effect from August 09, 2019, transferred regulatory powers of the Housing Finance Companies (“HFCs”) from the National Housing Bank (“NHB”) to the Reserve Bank of India (“RBI”). It is further stated that the RBI will review the extant of regulatory framework applicable to HFCs and issue the same in due course.  Until such time, HFCs were required to comply with the directions and instructions issued by NHB.[1]

Pursuant to the above and in order to increase the efficiency of HFCs, the RBI has now placed a draft of the changes proposed in the regulations applicable to HFCs for public comments till July 15, 2020, which we have briefly summarised below:
Continue Reading Housing Finance Companies – Proposed changes by RBI

To battle the ongoing COVID-19 pandemic, the central government and the various state governments imposed a nationwide lockdown in India. Additionally, to arrest the spread of the pandemic, government authorities and corporates are promoting “work from home”, and wherever necessary to work with minimum work force. Acknowledging the difficulties faced by corporates on account of the threat posed by COVID-19, requiring social distancing in day-to-day functioning, governmental authorities have granted various exemptions and reliefs by issuing circulars and amending rules to ease compliance requirements to be complied by companies.

This blog analyses the recent reliefs and relaxations announced by the Ministry of Corporate Affairs, Government of India (MCA), and the Securities and Exchange Board of India (SEBI), which may have an impact on financing transactions.


Continue Reading Social Distancing while approving financing transactions: MCA, SEBI Relaxations