In Port News 15/07/2016
In a bid to provide relief to around Rs 15,000 crore worth ofstuck port projects, the Shipping Ministry is working with the Finance Ministry and other stakeholders to make major changes in model concession agreements (MCA).
“There are around 20 port terminal projects which are lying idle due to bad structuring of the MCA. For example, a terminal that was built for loading and unloading of imported coal cannot be used for steel or automobile loading and is lying idle for many years. We are in discussions to make changes in the MCA,” a senior shipping ministry official said.
The private companies whose projects are stuck at government-owned major ports include Vedanta, JRE Infra Private Limited, RAS Infra Private Limited, AVR Infra Private Limited among others.
Officials further explained that even if these companies want, they cannot transport or move any other goods or commodities because the signed agreement does not allow them to do so.
According to sources, the shipping ministry at present is preparing a cabinet note to seek a change in the policy to allow transfer of commodities for private terminals in their agreements and make amendments to other redundant clauses. This will help these major projects which are stuck and would be able to transport any commodity.
The proposed changes will also help others to invest in the sector and bring in the required capital flows in the country, along with additional job opportunities.
While details on the new model are unavailable, it is expected to generate more revenue for each player .
While capacity utilisation at major ports significantly declining, the Shipping Ministry has been pitching for aggressively developing the country’s port sector. It is also claiming that investment to the tune of $12 billion is in the sector now and another $60 billion is in the pipeline for more projects in the future.
