Speaking to investors at a road show in London, surface transport minister Kamal Nath has assured that certain irritant clauses in the model concession agreement (MCA) will be resolved by the end of this month. Additionally, Nath also apprised foreign investors about the government?s plans to take up a few mega projects, requiring investment of Rs 5,000 crore and spanning 500 km each.
Interacting with participants at the ?Building India:Road Infrastructure Summit?, Nath said, ?The concerns with regard to MCA related to termination clause, exit clause, conflict of interest and definition of the associates, earlier raised by various stakeholders, are under consideration and shall be resolved very soon.?
?Other issues like determination of realistic total project cost, faster dispute resolution mechanism, longer concession periods and change in Companies Law to make special purpose vehicles (SPVs) more attractive, are being examined and soon a satisfactory resolution will be worked out,? added Nath.
According sources close to the development, talks are going on in the ministry to increase the stake holding in the conflict on interest clause, changing the minimum threshold limit for companies bidding for a project and introduction of exit clause. ?The stake holding requirement in conflict of interest clause may be raised up to 15% or even more. Termination clause may be removed and minimum threshold limit norms for bidding for a new project may be relaxed,? said an official close to the development.
Concessionaires had expressed discontent on the minimum threshold norms as it required a company bidding for a project to show experience of implementing projects worth double the amount of the cost of the project, in the last five years. Similarly, raising of the limit in conflict of interest clause will see lesser eliminations during the bidding process.