Ministry of Ports, Shipping and Waterways has finalized the guidelines for dealing with Stressed Public-Private Partnership (PPP) Projects at the Major Ports. According to the ministry, these guidelines have been framed for projects which became stressed during the construction stage as well as projects, both at Pre-COD and Post-COD stage, which became stressed due to lenders catergorizing the borrowings to the projects as NPA and/or lenders have approached National Company Law Tribunal (NCLT) for recovery of their dues. Here’s the mechanism, shared by the Ministry of Ports, Shipping and Waterways for Resolution of Stressed Projects:
1) For projects which became stressed during the stage of construction (Pre-COD stage), the Concessioning Authority would pay to the Concessionaire or to Concessionaire’s lenders (as the case may be), as full & final settlement for taking over the useful assets formed by the Concessionaire, an amount equal to the lower of the below sums:
a) The value of the work carried out by the concessionaire in accordance with the Concession Agreement as well as found useful by the Concessioning Authority; or
b) 90 per cent of Debt Due as defined in the Concession Agreement; or
c) Any other amount as may be agreed mutually in writing between the Concessionaire and Concessioning Authority as per the relevant provisions of MCA 2021
2) According to the ministry, projects which became stressed at both Pre-COD as well as Post-COD stage, because of borrowings being categorized by the lenders to the projects as NPA and / or lenders have approached National Company Law Tribunal for their dues’ recovery.
