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India’s port ministry finalises guidelines for reviving stressed projects

Monday, 16 May 2022 | 00:00

Ministry of Ports, Shipping and Waterways has finalised guidelines for early resolution of stuck public private partnership projects at major ports, an official statement said on Wednesday.

According to the statement, the aim of the guidelines is to facilitate revival of the projects falling in the category of stressed assets, and these guidelines will pave the way for resolution of the cases under arbitration.

“The port asset is likely to be put to use through rebidding,” it said, adding that the move will result in unlocking the blocked cargo handling capacity of approximately 27 million tonne per annum (MTPA).

It will create better trade opportunities for prospective investors and the port authority will start generating revenue.

The statement noted that the early resolution of stuck projects will repose confidence in investors and concessionaires, apart from creating job opportunities.

In the past decade, the Centre had invited private investments into the sector and several projects were awarded under Design, Build, Finance, Operate and Transfer (DBFOT) basis across major ports in the country.

According to the statement, the guidelines have been finalised for projects which became stressed during the construction stage, and also for projects which became stressed after lenders categorised borrowings for the projects as bad loans and/or have approached the National Company Law Tribunal for recovery of their dues.

Elaborating further about the mechanism for resolution of stressed projects, the statement said in case of the projects which became stressed during construction stage, the concessioning authority would pay to the concessionaire or to the lenders of the concessionaire (as the case may be), as full and final settlement for taking over the useful assets created by the concessionaire.

Some of the long standing disputes on stressed assets at various major ports that may see early resolution include: development of 13th multipurpose cargo berth on BOT (Build-Operate-Transfer) basis at Deendayal Port, development of 15th multipurpose cargo berth at Kandla at Deendayal Port and Offshore Container Terminal (OCT) at Mumbai port, among others.

Ports, shipping and waterways minister Sarbananda Sonowal said these guidelines will facilitate early resolution of various issues and revival of stressed projects along with unlocking the immense potential of those projects resulting in creation of more trade and job opportunities.

Currently, 34 projects worth over Rs 27,000 crore are operational and 25 projects worth Rs 14,000 crore are under implementation.

The operational projects have added capacity of around 350 MTPA at major ports. Under asset monetisation, 31 projects worth Rs 14,500 crore are to be awarded by 2025.

The statement said apart from current pipeline of 31 projects under asset monetisation, additional 50 projects (Rs 27,500 crore) have been identified for offer under public private partnership.

Out of these 50 projects, 14 projects (worth Rs 2,400 crore) are envisaged to be offered in FY 2022-23, it said.

With the aim to reduce arbitrations and litigation in the sector, new Model Concession Agreement (MCA) was launched by the Minister of MoPSW on November 21, 2021.
Source: PTI

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