Union Minister for Ports, Shipping & Waterways Sarbananda Sonowal announced the revised Model Concession Agreement (MCA) – 2021 for PPP projects at major ports. The new MCA will be applicable to all the future PPP projects at major ports, as well as projects which are already approved by the government but are still under bidding stage. There are more than 80 PPP/landlord projects in the sector with investment of over Rs 56,000 crore at various stages. Of these, 53 projects of Rs 40,000 crore are under operation, whereas 27 projects of more than Rs 16,000 crore are at implementation stage. With many changes drawn from best practices from across the sectors and extensive stakeholder consultation, the Model Concession Agreement – 2021 (MCA) will bring more confidence of developers, investors and lenders and other stakeholders in the ports sector and catalyse the investment in the sector.
Looking ahead, the Ministry of Ports, Shipping and Waterways has clearly defined pipeline of 31 projects of more than Rs 14,600 crore to be awarded on PPP till FY25, and it expects that the new MCA – 2021 will generate enthusiastic response from the stakeholders. The provision of Change in Cargo due to Change in Law or Unforeseen Events has been introduction for the first time. This provision will give the flexibility to undertake change in cargo in such situation and reduces risk for the concessionaire. Further, to reduce risk to the lenders and make the project more bankable, provision of compensation for the concessionaire’s event of default before Commercial Operations Date (COD) has been added. Another provision which lays out process for extension of concession period on the basis of performance and mutual agreement has been introduced.