Govt approves new model concession agreement for port projects | Current Affairs, Current Affairs 2019

Govt approves new model concession agreement for port projects

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Aiming to help and remove the hurdles in the development of ports, the Union cabinet has approved a new model concession agreement (MCA) for private public partnership (PPP) port projects.
According to an official source, the government has also appointed a special committee under the chairmanship of finance minister Arun Jaitley to examine whether the new MCA can be applied to the 12 stalled port projects worth Rs20,000 crore. The committee also includes law minister Ravi Shankar Prasad, shipping minister Nitin Gadkari and a NITI Aayog representative.
The newly formed agreement will also be utilized for new shipping titled, ‘Sagarmala Programme’ which need investments around Rs 8 trillion where new ports and 142 cargo terminals at major ports. These terminals are developed to use the country’s 7,157km long coastline.
According to the new MCA, payment of royalty for the ports will be now on ‘per million tonne of cargo handled’ instead of percentage of gross revenue based on tariff determined by Tariff Authority for Major Ports (TAMP). When the laws come to effect, the port operator will pay royalty on the actual and not on notional income.
Further, the new norms require the promoter to be locked into the project with majority stakes only for the first two years after it is commissioned; thereafter they are free to exit and can even sell their entire stake.

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