Easier norms for Rs.20, 000 cr port projects

    port projects
    A high-powered committee spearheaded by Finance Minister has started looking into the issues stalling projects worth Rs.20,000 crore in the port sector, Union Minister Nitin Gadkari said, claiming that about 12 shipping projects, including in Kandla and Visakhapatnam ports, have been stuck for long on account of various reasons including contractors abandoning them. In this connection, a panel will be formed deciding to pull these projects out of current slumber. The new panel will also be headed by Jaitley, will comprise the law minister, shipping minister and a Niti Aayog representative. He also said the new model concession agreement (MCA), revised after 2008 and approved by the Cabinet, will attract much more investments in the shipping sector. The new MCA is more investor-friendly and has several new features like change in revenue model as well as replacing the actual project cost‘ with approved project cost‘. Also, payment of royalty for the ports will be now on basis of per million ton of cargo handled instead of percentage of gross revenue based on tariff determined by the Tariff Authority for Major Ports (TAMP). It also has an exit clause on par with highway projects that allows developers to hold 51 per cent equity until two years after commercial operation date, after which they could exit by way of divesting their equity of up to 100 per cent.
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