Government has approved the revised Model
Concession Agreement (MCA) for Public Private Participation (PPP) projects in
Major Ports on 3.1.2018 in order to make port projects more investor friendly.
The revised agreement will also make the investment climate in the major port
sector more attractive. Salient features of the revised MCA are as follows:
route to developers by way of divesting their equity upto 100% after completion
of 2 years from the Commercial Operation Date(COD). This is now similar
to the MCA provisions of Highway Sector.
rent has been reduced from 200 to 120 per cent of the applicable scale of rates
for the proposed additional land under the provision of additional land to the
would pay Royalty on “per MT of cargo/TEU handled” basis which would be indexed
to the variations in the WPI annually. This will replace the present
procedure of charging royalty which is equal to the percentage of Gross
revenue, quoted during bidding, calculated on the basis of upfront normative
tariff ceiling prescribed by TAMP.
This will help to
resolve the long pending grievances of PPP operators that Revenue share is
payable on ceiling tariff and price discounts are ignored. The problems
associated with fixing storage charges by TAMP and collection of Revenue share
on storage charges which has plagued many projects will also get eliminated.
would be free to deploy higher capacity equipment/facilities/technology and
carry out value engineering for higher productivity and improved utilization
and/or cost saving of Project assets. “Actual Project Cost” would be replaced
by “Total Project Cost”.
The new definition
of “Change in Law” will also include (i) imposition of standards and conditions
arising out of TAMP guidelines/orders, Environmental Law &Labour Laws and
(ii) increase and imposition of new taxes, duties, etc for compensating the
Concessionaire. Since the viability of the project was affected,
concessionaire will now be compensated for the increase and imposition of new
taxes, duties etc. except in respect of imposition/increase of a direct tax,
both by Central & State Government.
for commencement of operations before Commercial Operation Date(COD).
This will lead to better utilization of assets provided by the Port in many
projects before the formal completion certificate.
refinancing is aimed at facilitating availability of low cost long term funds
to Concessionaire so as to improve the financial viability of the projects.
provision of SAROD-PORTS for redressal of disputes to the existing
Concessionaires also by introducing the Supplementary Agreement to be signed
between the Concessionaire and the Concessioning Authority, Introduction of
Complaint Portal for the use of port users.
Arrangement has been introduced for keeping periodical status report of the
information was given by the Minister of State for Shipping Pon Radhakrishnan
in a written reply to a question in Lok Sabha last week.