The Empowered Inter-Ministerial Group constituted by the Cabinet
Committee on Infrastructure vide office memorandum dated
April 30, 2014 has approved the MTA, for take-out financing of
Public Private Partnership ("PPP")
projects in the Ports Sector.
The said approval can be termed as a parting gift by the
outgoing government. Though, currently it is applicable to only
major ports but being based on a model concession agreement for the
private sector projects in major ports, it is touted to be a major
advancement for low cost and longer tenure financing in the port
The MTA empowers Infrastructure Debt Funds
("IDF") to take over loans extended to
developers of major port projects for financing of such projects.
If a project whose debt service obligations have not been waived,
rescheduled, etc. but has completed one year of commercial
operations, the project developer would be permitted to issue bonds
in accordance with the MTA.
This initiative of the government will go a long way in boosting
investor confidence by facilitating the refinancing of existing
short term/ high cost bank funds with longer tenure / low cost
funds through investment by IDFs. Such refinancing will reduce the
cost for infrastructure projects and also provide additional
liquidity by freeing up bank funds for newer projects.
Government of India announces steps to remove investment
hurdles in the Power Sector
Power, Coal and Renewable energy minister on June 20, 2014
announced a host of innovative measures to address the slump in
investment in power projects, following an hour-long meeting with
the heads of major power companies.
Major decisions announced on June 20, 2014 included reducing the
quantity of e-auction sales by Coal India Ltd
("CIL"), rationalising existing coal
linkages to save rail freight costs and free rail capacity, asking
CIL to provide fuel linkages for commissioned plants, allowing
surplus coal with companies to be transferred to CIL, requesting
the environment ministry to allow additional production from
operational mines, third-party inspection of coal despatches at the
loading (mine) end, and setting up an inter-ministerial panel to
discuss issues in this segment.
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