Centre finalises policy for dealing with stranded PPP projects at ports

The centre has finalised the guidelines for dealing with Stressed Public Private Partnership (PPP) Projects at Major Ports. These guidelines allow the takeover of useful portions of stranded projects at various stages of completion by major ports.

An official statement said that the scheme covers projects both at Pre-Commercial Operation Date (COD) and Post-COD stage, which became stressed due to borrowings being categorised by the lenders to the projects as Non-Performing Asset (NPA). Projects where lenders have approached the National Company Law Tribunal (NCLT) for recovery of their dues are covered as well.

Projects which became stressed during construction stage, due to inability of a concessionaire to continue with the execution of the project can also be resolved through these guidelines. “Such projects may have become stranded due to aggressive bidding and the optimistic projections with regard to volumes and charges, and unforeseen dynamic changes in their business,” an official statement said.

Commenting on the guidelines, Minister for Ports, Shipping and Waterways, Sarbananda Sonowal, said, “These Guidelines will facilitate for 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.”

The official statement listed the development of the 13th Multipurpose Cargo (Other than Liquid/ Container Cargo) Berth on BOT Basis at Deendayal Port and of the 15th Multipurpose Cargo Berth at Kandla at Deendayal Port as long standing stressed PPP projects. The Offshore Container Terminal (OCT) at Mumbai Port, Construction of NCB-II at VOC Port, and Berth EQ-1A at Visakhapatnam Port also found mention.

In case of the projects which became stressed during construction stage, the Concessioning Authority (Major Port) 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.

The new guidelines allow the takeover of a stranded project based on the value of the work done by the concessionaire in accordance with the Concession Agreement and found useful by the major port. A takeover by a major port can also be implemented by paying 90 per cent of the Debt Due as defined in the Concession Agreement. The Major Port and the stressed concessionaire can also agree for a takeover at any other amount as may be mutually agreed between the two.

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