Union cabinet approves amendments in MCA

The Union cabinet approved amendments in the model concession agreement (MCA) for PPP port projects on January 3, 2018. The amendments in the MCA envisage the constitution of the Society for Affordable Redressal of Disputes – Ports as a dispute resolution mechanism similar to the provision available in the highway sector. The other salient features of the revised MCA include the provision of an exit route to developers by way of divesting up to 100 per cent of their equity after completion of two years from the commercial operation date, a reduction in land rent from 200 per cent to 120 per cent of the applicable scale of rates for the proposed additional land (under the provision of additional land to the concessionaire), and payment of royalty by the concessionaire on a “per mt of cargo/twenty-foot equivalent units handled” basis which would be indexed to the variations in the wholesale price index annually. The amendments have been proposed to make port projects more investor friendly and make the sector’s investment climate more attractive.