After much debate and discussion with the Planning Commission, the department of shipping has decided to prepare a completely new modelconcession agreement (MCA) for development of ports.
The decision comes due to a number of unresolved issues between the department of shipping and the Plan panel about various clauses of the MCA. Sources said the fresh draft would be ready in the next few months.
While the department of shipping had agreed to the Plan panel’s proposal to introduce a normative model of tariff fixation where in the current system of cost plus tariff mechanism would be used with a financial cap on it, there was no consensus between the two on other terms and conditions of the MCA.
Inclusion of the criteria of performance-based indicators for ports, making escrow accounts mandatory for concessionaires were some of the main issues, which continued to be a bone of contention.
In fact, in a bid to make the department of shipping more agreeable to its plans, the Planning Commission had come out with its draft of the MCA last year. Given India’s recent Exim trade boom, the government is eyeing an investment of $13.5 billion in the major ports under National Maritime Development Program (NMDP) to boost infrastructure at these ports in the next 7 years. However, the disagreement between the shipping department and the Plan panel have delayed the MCA by over a year, which in turn has derailed the process of development of ports. The ministry of road highways and shipping is looking for upgradation and development of ports using the public private partnership route, for which the MCA is required.
The decision comes due to a number of unresolved issues between the department of shipping and the Plan panel about various clauses of the MCA. Sources said the fresh draft would be ready in the next few months.
While the department of shipping had agreed to the Plan panel’s proposal to introduce a normative model of tariff fixation where in the current system of cost plus tariff mechanism would be used with a financial cap on it, there was no consensus between the two on other terms and conditions of the MCA.
Inclusion of the criteria of performance-based indicators for ports, making escrow accounts mandatory for concessionaires were some of the main issues, which continued to be a bone of contention.
In fact, in a bid to make the department of shipping more agreeable to its plans, the Planning Commission had come out with its draft of the MCA last year. Given India’s recent Exim trade boom, the government is eyeing an investment of $13.5 billion in the major ports under National Maritime Development Program (NMDP) to boost infrastructure at these ports in the next 7 years. However, the disagreement between the shipping department and the Plan panel have delayed the MCA by over a year, which in turn has derailed the process of development of ports. The ministry of road highways and shipping is looking for upgradation and development of ports using the public private partnership route, for which the MCA is required.