Republic of India - PPP Projects in Major Ports

[Hindustani78]

Cabinet
03-January, 2018 02:34IST
Cabinet approves revised Model Concession Agreement for PPP Projects in Major Ports

The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved amendments in the Model Concession Agreement (MCA) to make the Port Projects more investor-friendly and make investment climate in the Port Sector more attractive.

Salient features:

The amendments in the MCA envisage constitution of the Society for Affordable Redressal of Disputes - Ports (SAROD-PORTS) as dispute resolution mechanism similar to provision available in Highway Sector.

The other salient features of the revised MCA include the following:-

1. Providing exit route to developers by way of divesting their equity upto 100% after completion of 2 years from the Commercial Operation Date(COD). This is now similar to the MCA provisions of Highway Sector.
2. Under provision of additional land to the Concessionaire, land rent has been reduced from 200% to 120% of the applicable scale of rates for the proposed additional land.
3. Concessionaire would pay Royalty on "per MT of cargo/TEU handled" basis which would be indexed to the variations in the WPI annually. This will replace the present procedure of charging royalty which is equal to the percentage of Gross revenue, quoted during bidding, calculated on the basis of upfront normative tariff ceiling prescribed by Tariff Authority for Major Ports (TAMP). This will help to resolve the long pending grievances of Public Private Participation (PPP) operators that Revenue share is payable on ceiling tariff and price discounts are ignored. The problems associated with fixing storage charges by TAMP and collection of Revenue share on storage charges which has plagued many projects will also get eliminated.
4. Concessionaire would be free to deploy higher capacity equipment/facilities/technology and carry out value engineering for higher productivity and improved utilization and/or cost saving of Project assets.
5. "Actual Project Cost" would be replaced by "Total Project Cost".
6. The new definition of "Change in Law" will also include

1. imposition of standards and conditions arising out of TAMP guidelines/orders, Environmental Law & Labour Laws and
2. increase and imposition of new taxes, duties, etc. for compensating the Concessionaire. Since the viability of the project was affected, concessionaire will now be compensated for the increase and imposition of new taxes, duties etc. except in respect of imposition/increase of a direct tax, both by Central & State Government.

• vii. Provision for commencement of operations before COD. This will lead to better utilization of assets provided by the Port in many projects before the formal completion certificate.

1. Provision regarding refinancing is aimed at facilitating availability of low cost long term funds to Concessionaire so as to improve the financial viability of the projects.
2. Extending the provision of SAROD-PORTS for redressal of disputes to the existing Concessionaires also by introducing the Supplementary Agreement to be signed between the Concessionaire and the Concessioning Authority.
3. Introduction of Complaint Portal for the use of port users.
4. A Monitoring Arrangement has been introduced for keeping periodical status report of the project.

The amendments have been proposed keeping in view the experience gained in managing PPP projects in port sector during the last twenty years and to obviate the problems being faced on account of certain provisions in the existing MCA. The amendments in the MCA have been finalized after extensive consultation with the stakeholders.



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[Hindustani78]

Ministry of Shipping
5 -January, 2018 06:19IST

Major Ports register positive growth of 3.64% during April-Dec, 2017

The major ports in India have recorded a growth of 3.64% and together handled 499.41 Million Tonnes of cargo during the period April to December, 2017 as against 481.87 Million Tonnes handled during the corresponding period of previous year.

For the period from April- December 2017, Eight Ports (Kolkata (incl.Haldia), Paradip, Visakhapatnam, Chennai, Cochin, New Mangalore, JNPT and Kandla) have registered positive growth in traffic.

Cargo traffic handled at Major Ports:

· The highest growth was registered by Cochin Port (17.27%), followed by Paradip (14.59%), Kolkata [incl. Haldia] (12.45%), New Mangalore (6.60%) and JNPT (5.94%).

· Cochin Port growth was mainly due to increase in traffic of POL (24.10%) and Containers (10.79%). There was decrease in traffic of other Liquids (-23.16%), Fertilizer Raw Materials (-20.00%), Finished Fertilizers (-11.76%) and other Misc. Cargo (-6.21%).

· In Kolkata Port, overall growth was 12.45%. Kolkata Dock System (KDS) registered traffic growth of 1.92%. Whereas Haldia Dock Complex (HDC) registered positive growth of 17.67% which is highest among all the Major Ports.

· During the period April to December 2017, Kandla Port handled the highest volume of traffic i.e. 81.12 Million tonnes (16.24% share), followed by Paradip with 74.40 Million Tonnes (14.90% share), JNPT with 48.89 Million Tonnes (9.79% share), Mumbai with 47.53 Million Tonnes (9.52% share), and Visakhapatnam with 46.56 Million Tonnes (9.32% share). Together, these five ports handled around 60% of Major Port Traffic.

· Commodity-wise percentage share of POL was maximum i.e. 33.90%, followed by Container (19.84%), Thermal & Steam Coal (13.35%), Other Misc. Cargo (12.19%), Coking & Other Coal (7.56%), Iron Ore & Pellets (6.70%), Other Liquid (4.18%), Finished Fertilizer (1.20%) and FRM (1.08%).

Along with focused efforts to improve operational efficiency of ports and increase traffic at ports, Ministry of Shipping is making steady strides towards utilizing the country’s river system & inland waterways aseconomically viable and environment friendly mode of transport.

Opening a new world for business & employment opportunities in North-East through inland waterways, recently, Shri Nitin Gadkari, Union Minister of Shipping, Road Transport & Highways, Water Resources, River Development & Ganga Rejuvenation flagged off regular cargo movement on Brahmaputra (NW2) from Pandu Port to Dhubri in Assam. Focused efforts are been made to connect North-East region to Kolkata, Haldia, Mongla and Chittagong ports, provide efficient logistics in North-East region and set up Ro-Ro off services across river banks

The Ministry of Shipping, under the leadership of Shri Gadkari is all geared up to create an enabling environment for growth of seaplane led air connectivity and leverage water bodies in country. After witnessing the Seaplane trial in Mumbai recently, the Minister has requested the Ministry of Civil Aviation to prepare a regulatory framework for seaplanes, keeping in mind all safety aspects.

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi recently has given its approval for implementation of the Jal Marg Vikas Project (JMVP) for capacity augmentation of navigation on National Waterway-1 (NW-1). The Rs 5,369 Crore project, which is expected to be completed by March 2023, will bring down the logistic cost in the country and lead to major infrastructure development like multi-modal and inter-modal terminals, roll on-roll off (Ro-Ro) facilities, ferry services, and navigation aids. The JMVP will create an alternative mode of transport that will be "environment friendly and cost effective" and will give boost to economy & trade, generate huge business & employment opportunities thus converting Ganga into the economic lifeline of people in states of Uttar Pradesh, Bihar, Jharkhand & West Bengal.

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