Home » Business » Government Revises Model Concession Agreement for PPP in Major Ports 

Government Revises Model Concession Agreement for PPP in Major Ports 

Government Revises Model Concession Agreement for PPP in Major Ports 

In order to make  port projects more investor friendly and make investment climate in the Major Port sector more attractive, the Government has approved the revised Model Concession Agreement (MCA) for Public Private Participation (PPP) projects in Major Ports on 3.1.2018.  Salient features of the revised MCA are as follows :

Providing exit 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.

 

  1. Under provision of additional land to the Concessionaire, land rent has been reduced from 200% to 120% of the applicable scale of rates for the proposed additional land.
  • Concessionaire 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.
  1. Concessionaire 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.
  2. “Actual Project Cost” would be replaced by “Total Project Cost”.
  3. 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.
  • Provision 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.
  • Provision regarding refinancing is aimed at facilitating availability of low cost long term funds to Concessionaire so as to improve the financial viability of the projects.
  1. Extending the 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.
  2. Introduction of Complaint Portal for the use of port users.
  3. A Monitoring Arrangement has been introduced for keeping periodical status report of the project.

This information was  given by the Minister of State for Shipping Shri Pon Radhakrishnan in a written reply to a question in Lok Sabha

About Indianindustry Media

Leave a Reply

Your email address will not be published. Required fields are marked *

*

x

Check Also

Government Blocks 118 Mobile Apps Which are Prejudicial to Sovereignty and Integrity of India, Defence of India, Security of State and Public Order

The Ministry of Electronics and Information Technology, Government of India invoking it’s power under section ...

India will play a leading role in the future global political framework in terms of economy and Disaster Risk Management:Nityanand Rai

  The Union Minister of State for Home Affairs, Shri Nityanand Rai has said that ...

Ministry of Shipping has facilitated more than 1 lakh crew change in Indian ports and charted flights

Ministry of Shipping has facilitated more than 1,00,000 crew change on Indian ports and through ...

Structural Reforms are a Key Priority of the Government: Finance Minister

Addressing the captains of the Indian Industry, Union Minister of Finance and Corporate Affairs, Smt. ...

Government of India and AIIB sign agreement for $500 million to improve the network capacity, service quality and safety of the suburban railway system in Mumbai

The Government of India, the Government of Maharashtra, Mumbai Railway Vikas Corporation and the Asian ...

DRDO identifies 108 Systems and Subsystems for industry to design, develop and manufacture towards achieving “Atmanirbhar Bharat”

Responding to the clarion call given by Hon’ble Prime Minister for “Atmanirbhar Bharat”, the Defence ...

MoU for skill development in Port and Maritime sector signed between the Ministry of Shipping and the Ministry of Skill Development and Entrepreneurship;

To reap the benefit for vast employment opportunities in maritime sector and with a view ...

Shipping Ministry reduces port tariff rates ranging from 60% to 70% for Cruise Ships

Ministry of Shipping has rationalized tariff rates for the Cruise vessels. The net effect of ...

Tax system aims to be Seamless, Painless, Faceless : PM

Prime Minister Shri Narendra Modi launched a platform for “Transparent Taxation – Honouring the Honest” ...

DAC approves procurement proposals worth Rs 8,722.38 crore, including 106 Basic Trainer Aircraft for IAF

To strengthen the Armed Forces by relying on indigenous capability to take forward the initiative ...

WP2Social Auto Publish Powered By : XYZScripts.com