Another panel set up to fine-tune ports MCA

“We have asked the legal teams of both sides to discuss the contentious clauses and provisions that may need to be altered. Keeping in view the discussions of the two sides,the government has asked member,Planning Commission,to submit a report in a month’s time,” senior finance ministry officials told The Indian Express.

The MCA for ports has been prepared by the ministry of shipping and was approved by the Cabinet in 2008. More than Rs 16,000 crore of port development projects have already been awarded in line with the provisions of the existing MCA.

Recently,the ministry of shipping had written to Sudha Pillai,member secretary,Planning Commission,seeking clarity on the Plan panel’s final stand as it was ready to table a Cabinet note seeking changes to the MCA in line with Chaturvedi’s recommendations given in September,2010.

In the report,Chaturvedi had asked the ministry to make amendments such as replacing the concept of actual project cost with total project cost so as to include both the estimated capital cost at time of awarding and the actual capital cost of the project upon completion.

It had also recommended deleting the phrase “from time to time” in the clause that aligns tariff changes with the wholesale price index (WPI). The objection was that the term confused the developer of the tariffs that will be charged during the concession period creating uncertainty over returns on investment. The Chaturvedi committee had been set up last year to clarify the provisions of the MCA and make it explicit so that they are less prone to litigation.