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Punjab Agro Industries Corporation Limited

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Right to Information Act, 2005

Punjab Agro Industries Corporation Limited (PAIC)

The procedure followed in the decision making process, including channels of supervision and accountability - back

PAIC is the premier organization of the State Govt., engaged in the promotion of agro-processing industry in Punjab. The projects are set up in joint/ assisted sector. In joint sector projects, PAIC contributes upto 26% of total equity whereas in assisted sector projects, PAIC's contribution is maximum of 15%. In the normal course, PAIC identifies viable projects and then invites offers from interested entrepreneurs through press for their implementation in joint/assisted sector in the State of Punjab. The proposals so received are examined by a Committee of PAIC’s officers and finally the most suitable entrepreneur is selected for the purpose. The selection of entrepreneur is based on factors like availability of financial resources, past experience of the entrepreneur and capacity to manage medium/large projects. The project proposals alongwith the recommendations of the Committee are placed for consideration by the Board of Directors of PAIC. On approval of the Board, a Memorandum of Understanding in the standard format is executed with the selected entrepreneur. The project proposal is then put up to the Project Approval Board (PAB) of the State Govt. to make investment decision in this regard. After the project proposal is approved by PAB, Financial Collaboration Agreement (FCA) in the approved format of PAB, is executed with the selected party for setting up of the project at a specified location in Punjab. Thereafter, in accordance with the terms of the FCA, PAIC monitors the progress made in the implementation of the project and based on the recommendations of its project monitoring committee, PAIC releases its share of equity on proportionate basis towards the implementation of the project. The day to day working of the project is looked after by the private collaborator. In accordance with the terms of FCA, PAIC nominates its directors on proportionate basis on the Board of the new company.


PAIC also entertains requests received from parties willing to set up agro processing projects of their choice in Punjab. In such case, the proposals are examined in detail. After having satisfied on the feasibility and commercial viability of the project, PAIC signs Memorandum Of Understanding and then follow the same procedure as given in the proceeding para.

Collaborator or his nominee in its capacity as Managing Director must act according to the provisions of the Companies Act and the Memorandum of Article & Association of the company and the Financial Collaboration Agrrement signed with him under the overall comptrol of the Board of Directors. In case of default, PAIC can avail of the remedial measures as provided in the Companies Acte and other allied corporate laws and also as per the specific provisions of the Finanacial Collaboration Agreement.


With regard to Agri Mega Project proposals, PAIC receives applications in the prescribed format accompanied by project synopsis alongwith details of the promoters, location, proposed fixed capital investment, employment potential, implementation schedule and the details of concessions sought. Proposal is then circulated to the concerned departments for their comments. The proposal alongwith comments, if any, received from the concerned departments is placed before the Screening Committee headed by the Chief Secretary and comprising of Administrative Secretaries of the Department of Finance, Industries, Agriculture, Housing, Science Technology & Environment, Power and Excise & Taxation and other concerned departments as may be required for making recommendations to the Empowered Committee. Recommendations of the Screening Committee are placed before the Empowered Committee headed by the Chief Minister, in its next meeting which may be held as & when required keeping in view the number of cases recommended by the Screening Committee. After approval by the Empowered Committee and issue of proceedings of the meeting, Letter of Intent (LOI) is issued within 15 days alongwith draft agreement. On fulfillment of conditions of LOI, Agreement is signed with the applicant. Period of six months is provided in the LOI for fulfillment of conditions of LOI and signing of Agreement, failing which, the LOI/Approval is lapsed unless extended for further period of not more than six months, on the application of the promoter explaining the circumstances and reasons for seeking extension. Copy of signed agreement is circulated to all concerned departments for issue of orders/notifications in respect of concessions pertaining to their department. At the same time the company is requested to provide the status of implementation of the mega project. The company is also requested to provide a certificate from a practicing Chartered Accountant with regard to the investment made in the creation of fixed capital assets of the project. On receipt of the above documents, a team of PAIC’s officers visits the works of the company to see the physical and financial progress of the project. The variations/shortcomings, if any, are informed to the Screening Committee/Empowered Committee. Where the project has been implemented in the sprit of the agreement, PAIC writes to the concerned departments apprising about the status of the project and requesting them to issue orders/notifications with regard to the concessions approved by the Empowered committee. In case the company fails to implement the project in accordance with the provisions of para 5 (i) of the agreement within the stipulated period mentioned therein, the concessions enumerated in para 5 (ii) of the agreement stand automatically withdrawn and the company has no claim or liability whatsoever on the State Government in this regard. The Government of Punjab is entitled to recover the cost of the aforesaid reliefs/concessions availed by the company (as dues recoverable by the Government as arrears of land revenue) in the event of failure on the part of the company to fulfill its obligations.

 

 
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