NHAI to review Model Concession Agreement

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NHAI to review Model Concession Agreement

According to local sources, the National Highways Authority of India (NHAI) is looking to improve the existing model concession agreement (MCA) that sets out the terms of the PPP contracts.

It's one of several measures the roads ministry is considering in order to revive the public-private partnership (PPP) model.

This arrives in a moment when many PPP projects in the road sector are stalled. As many as 21 highway projects failed to attract bids over the last two fiscal years.

Concessionaires, lenders and industry bodies have requested changes in the MCA last year to address dispute resolution, cost escalation due to delays in getting government clearances, liberalisation of refinance,  recovery of the debt given to a terminated road project if a substitute is not found and other issues.

In summary, the MCA is to be modified to allow renegotiation and other flexibilities.

According to a public official, the NHAI is now gathering comments from all parties to send them to the roads ministry and thereafter circulate it for suggestions to the finance ministry, Planning Commission.

The MCA for highways was last revised in 2009.

In early June we announced that the NHAI is putting all information related to private public partnership (PPP) projects signed by them in an online platform to ensure transparency.

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