New Delhi, Sep 22 (IANS) The Shipping Ministry on Thursday proposed a new model concession agreement (MCA) to attract more private sector investments in the development of port infrastructure.
According to the Ministry of Shipping, the proposed MCA will replace the existing agreement which came into existence in January 2008.
“The proposed MCA has taken into account the suggestions provided in various reports by Member Planning Commission (2010), Indian Ports Association (IPA-2015) and Kelkar Committee Report (2015),” the ministry said in a statement.
The ministry elaborated that one of the objectives of the revised MCA is more equitable allocation of project risks.
Other provisions in the proposed MCA include handling of unforeseen circumstances, removal of ambiguity in existing provisions, and to attract more private sector investment.
“The revised MCA has proposed that the concessionaire shall hold 51 per cent equity until three years after Commercial Operation Date (COD) and 26 per cent thereafter for another three years,” the statement said.
“Hence, the private party would be free to exit after six years from COD. The concessionaire may approach the Concessioning Authority to waive the equity holding requirement during the second three-year term if performance parameters have been achieved during the first three-year period.”
Other features of the proposed MCA include provision for refinancing, along with mid-term review of concession and grievance redressal system.
“The proposed changes in the Model Concession Agreement have been uploaded on the official website of the Ministry of Shipping for seeking comments of the stakeholders,” the statement added.