New model pact to create keen interest in Rs 14,600 crore PPP ports projects.

Union minister Sarbananda Sonowal has announced the revised model concession agreement 2021 for public private partnership projects at major ports and said that 31 projects of over Rs 14,600 crore will be awarded till 2024-25.

According to the Ports, Shipping & Waterways ministry statement, at the moment, there are more than 80 public private partnership (PPP) 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, the statement said.

"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 model concession agreement (MCA) - 2021 will generate enthusiastic response from the stakeholders," Sonowal said.

The Union ports, shipping & waterways minister said 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.

The minister said that 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 catalyze the investment in the sector.

Sonowal pointed out that provision of change in cargo due to change in law or unforeseen events have been introduced for the first time.

He said there have been cases in the past wherein due to external and unforeseen factors traffic for a particular commodity has dropped during the concession period thereby impacting the overall viability of the terminal.

"The concessionaire did not have flexibility to handle a different cargo and the asset constructed was not being utilized optimally, the minister said, adding that this provision will give the flexibility to undertake change in cargo in such situation and reduces risk for the concessionaire.

Sonowal said that under the new MCA, provision has been made for providing flexibility to the concessionaires to fix their tariff based on market conditions which will allow level playing field for the private terminals at major ports to compete with private ports for cargo.

Further, the minister said to reduce risk to the lenders and make the project more bankable, provision of compensation for concessionaire's event of default before Commercial Operations Date (COD) has been added.