Office Address
123/A, Miranda City Likaoli Prikano, Dope
Phone Number
+0989 7876 9865 9
+(090) 8765 86543 85
Email Address
info@example.com
example.mail@hum.com
123/A, Miranda City Likaoli Prikano, Dope
+0989 7876 9865 9
+(090) 8765 86543 85
info@example.com
example.mail@hum.com
The Ministry of
Ports, Shipping and Waterways has started work on revising the so-called model
concession agreement for public-private-partnership (PPP) cargo terminals at
major ports three years after it was last amended to make the terms “more
investor friendly” given the need for large private funds as state-owned ports
move to a landlord model of operations. A
concession agreement sets out the terms and conditions of a port contract and
puts the project in motion.
Under the landlord model, the publicly owned port authority provides
common/basic infrastructure such as dredging and breakwater while the cargo
handling activities are outsourced to private specialists on long-term
contracts or concessions.
On 4 September, a
panel set up by the Ministry discussed with private firms the areas that needed
refinement.
The model concession agreement was last amended in 2021, making it
significantly better than the earlier versions. It was finalised after the
Major Port Authorities Act 2021 – the law that governs major ports – came into
force, allowing cargo handlers (both state-owned and private) to set market
driven rates, by dismantling the rate regulator which existed when these ports
were run as trusts.
“The Ministry’s
intention is to make it more investor friendly. Probably they
think there are still some provisions which are not favourable to the private
investors and lenders. They wanted to understand the concerns/problem areas
from the private operators and see how best it can be improved upon,” said a
person who attended the 4 September meeting.
“We don’t know how
much time they will take to finalise the amendments, but at least they are
trying to understand the problems, because their objective is to go for 100
percent landlord port model. For that, lot of private
investments are required. They have to make the terms and conditions very
attractive, otherwise private investors will not come,” said a second executive
who attended the deliberations.
Some of the terms in the current
model concession agreement that has roiled the private investors and lenders
include clauses relating to debt due, total project cost, creation of charge,
minimum guaranteed cargo, Wholesale Price Index escalation on royalty payments
and compensation payable in the event of termination
