Lok Sabha Question No. 2254 (UNSTARRED), answered on 2018-03-08
Subject: MCA for Port Projects
Ministry: SHIPPING
Asked by: HARI BABU KAMBHAMPATI

## GOVERNMENT OF INDIA MINISTRY  OF SHIPPING

## LOK SABHA UNSTARRED QUESTION NO.2254

## TO BE ANSWERED ON 8th MARCH, 2018

## MCA FOR PORT PROJECTS

## 2254. DR. KAMBHAMPATI HARIBABU:

Will the Minister of SHIPPING  be pleased  to state:

## +dc?ti-6td*

- (b) if so, the details thereof;
- (a) whether the Government  proposes  to prepare a new revised Model concessior Agreement (MCA) for various  port projects in the country;
- (c) the details of ports that are presently being  constructed by the Government, State-wise; and

## ANSWER

- (d) the details of investment expected after implementation of this new/revised MCA?

MINISTER OF STATE IN THE MINISTRY OF SHIPPING (SHRI PON. RADHAKRISHNAN)

- (a)&(b):With  a view to make the Port Prolects more investor  friendly and make investrnent climate in the Major Port sector more attractive,  Government  has approved  the revised Model concession Agreement  (MCA) for Public Private Participation (PPP) projects  in Major Porls on 3.1 .2018. Salient features  of the revised MCA are at Annexure.
- (c) At present no new Major Port is under construction stage.
- (d) No such projection regarding expected investment after implementation of newlrevised  MCA is available.

Conld...

## ANNEXURH

salient features  of the revised Model concession  Agreement (McA)  are grven below:-

- (i) Providing  exit route to developers  by way of divesting  their equity upto 10rl% after completion  of 2 years from the commercial operation  Date(coD).  This is now riimilar  r,-, the MCA provisions  of Highway Sector.
- (ii) Under provision  of additional land to the Concessionaire,  land rent has been reciu  led from 2ooo/o  lo 120o/o  of the appricable  scare of rates for the proposed additionar  rand.
- (iii) concessionaire would  pay Royalty on "per MT of cargo/TEu handled" basis whioh  would be indexed to the variations  in the WPI annually.  Thii will replace the presenl  ploce<jure of charging royalty which is equar to the perientage  of Gross  revenue,  quoied  durirrg bidding, calculated on the basis  of upfront normative  tiriff ceiling  prescribed by Tnlrlp This will help to resolve  the long  pending grievances  of PPP operJtors  that Revenue share is payable  on ceiling  tariff and price  discounts  are ignored. The problems  associ6(ecJ  with fixing storage charges by TAMP  and collection  of Revenue  share  on storage  chargr:s which has plagued  many projects will also  get eliminated.
- (iv) Concessionaire  would be free to deploy higher capacity equipment/facilities/tec.hnology and carry out value engineering for higher productivity  and improved utrlization  an,l/'or co$t saving of Project assets.
- (v) "Actual  Project Cost"  would be replaced by .Total  proJect Cost,,.
- (vi) The new defrnition  of "change  in Law'' will also include (i) imposition  of stand;rds and conditions  arising  out of TAMP gurdelines/orders,  Environmental  Law & Labour L.rws and (i) increase and imposition of new taxes, duties,  etc for compensating the conces:;ionaire. Since the viability of the project was affected, concessionaire will noi be compen:;ated for the increase  and imposition of new taxes, duties etc. except rn respect of imposition/increase  of a direct tax, both by Central & State  Governmeni.
- (vii) Provision for commencement of operations before commercial operation Dai-.(coD). This  will lead  to better utilization of assets provided by the Port in many projects brLfore the formal  completion  eertificate.
- (viii) Provision,  regarding refinancing  is aimed at facilitating availability  of low cost iong  term funds to concessionaire so as to improve the financial-viability of the projects.
- (ix) Extending  the provision  of sARoD-poRTS for redressal  of disputes  to the existing concessionaires also by rntroducing  the Supplementary Agreement  to be signed between the Concessionaire  and the Concessioning Authority.
- (x) lntroduction  of Complaint  portal  for  the use of port users.
- (xi) A Monitoring Arrangement  has been introduced for keeping periodical status repo( ot the project.