PM moots draft bill on resolution of disputes in public contracts

Prime Minister Manmohan Singh has asked the Planning Commission to formulate a draft bill on dispute resolution in public contracts in consultation with all stakeholders and ministries.

An official release said on Thursday that dispute resolution in large public contracts was an area of growing concern and the Singh initiated the first steps in improving the institutional arrangement for dispute settlement.

“Following the rapid expansion of public private partnerships (PPP), which have already attracted investment of a few lakh crore rupees in different sectors, there are concerns about the dispute resolution mechanisms in place. There is a certain dissatisfaction among private sector participants arising from the responses they receive from project authorities about the obligations of project authorities,” the release said.

The government said there are a few hundred PPP contracts already in operation and more are being signed at a fairly rapid pace. “As a result of this expansion, contractual disputes have been rising steadily and it has now become essential to consider an institutional arrangement that would address such disputes expeditiously and at reasonable costs. It is in the interests of all concerned to set up an institutional mechanism that can provide assurance of speedy resolution of disputes, especially in respect of large public contracts. This could be a dedicated institutional arrangement, drawing from the experience of various other tribunals, while eliminating any litigation up to the High Court.” The Planning Commission will conceptualise this further and present a draft bill for consideration of the government, the release added.