Concession Agreement Ppp India

The concession should not be confused in the context of a concession contract and a lease. A “lease agreement” is an interest in a property, while a “concession” is a license for exploitation on the land, but no inherent property rights. Concession agreements are very different from other more common trade agreements concerning the supply of goods and services. Unlike other business contacts, usually made for transactions of assets and real estate held by private parties, concession contracts apply to public goods and services and are intended to provide essential facilities and services. In addition, concession contracts are long-term contracts and usually involve quality transactions. Model Concession Agreements (MCAs) have played an important role in unbundling the complexity of these transactions. The use of a standardized form for concession contracts reduces unnecessary delays and higher transaction costs. It also simplifies the tendering procedure and creates the confidence of bidders and financiers who invest in infrastructure development. In addition, the application of standardized WABs reduces the costs and risks of small public authorities and private parties carrying out small projects at the local level, since in most cases they do not have the same expertise as the agencies and forums that develop CSAs. In 2015, a committee chaired by Vijay Kelkar was created to revive the PPP infrastructure model. In its report, the Committee recommended the development of a review and renegotiation mechanism to introduce flexibility into concession agreements.

“Instead of reviewing the MCA, why not think about solving the problems of existing concession contracts? You are only talking about a new MCA. The need for the time is to look at the difficulties/problems in existing concession agreements and correct them,” he said. This agreement is to be read as part of the Major Ports Trust Act 1983 and other port laws. In particular, the level of tariffs is regulated by the tariff authority for major ports and not set by the concession agreement. Ownership of the project assets under a concession agreement remains in the hands of the Authority, while the concessionaire obtains only constructive ownership. Once the agreement is completed, all project resources will be returned to the Authority. In essence, a concession is a license that is granted by government authorities to a private public service performing and performing body, granting for that purpose certain rights for a limited period of time, held exclusively by the government under the law. In return, the government transfers certain operational risks to the private organization. In the early stages of PPP in India, several national governments and government authorities developed their own concession contracts. This has resulted in implementation difficulties. In 2000, the Planning Commission was launched with the first Model Concession Contract (MCA) for the motorway sector. For other sectors, WABs were then developed for other sectors, on the model of the planning commission.

The development of WABs has made it possible to standardize concession agreements and increase the consistency and efficiency of transactions. From time to time, the Indian government has set up various commissions to oversee the development of concession contracts. The B.K. Chaturvedi Committee was established in 2009 to address procedural obstacles to the National Highway Development Project (NHDP). In its report, the Committee recommended several amendments to the CSA. It supported the deletion of the termination clause and proposed to extend the concession period if the concessionaire continues to extend the facility. . .