Shri Sarbananda Sonowal, Minister of Ports, Shipping & Waterways, today announced the revised Model Concession Agreement (MCA) - 2021 for PPP projects at Major Ports. The new MCA, Sonowal said in a statement, will apply to all future PPP projects at major ports, as well as projects that have already been approved by the government but are still in the bidding process. According to Sonowal, the sector currently has over 80 PPP per landlord projects in various stages with a total investment of over Rs 56,000 crore. There are 53 projects worth Rs 40,000 crore in operation, and 27 projects worth more than Rs 16,000 crore are in the planning stages. The Minister informed that the Model Concession Agreement (MCA) – 2021 will increase the confidence of developers, investors, lenders, and other stakeholders in the Ports sector by incorporating many changes based on best practices from other sectors and extensive stakeholder consultation. Looking ahead, the Ministry of Ports, Shipping and Waterways has a clearly defined pipeline of 31 projects worth more than Rs 14,600 crore that will be awarded on a PPP basis until FY25, and it anticipates a positive response from stakeholders to the new MCA - 2021. Shri Sonowal explained that the provision of Change in Cargo due to Change in Law or Unforeseen Events has been introduced in the Model Concession Agreement (MCA) – 2021. According to Sonowal, there have been cases in the past where traffic for a particular commodity dropped during the concession period due to external and unforeseen factors, affecting the terminal's overall viability. The concessionaire lacked the flexibility to handle a different cargo, and the asset built was not being used to its full potential. This provision, according to the Minister, will give the concessionaire the flexibility to change cargo in such a situation while also lowering the concessionaire's risk. According to Shri Sonowal, the new MCA allows concessionaires to set their tariffs based on market conditions, allowing private terminals at Major Ports to compete with private ports for cargo on a level playing field. A provision for compensation in the event of Concessionaire default before Commercial Operations Date (COD) has also been added to reduce risk to lenders and make the project more bankable. Image Source