FCC

Adani ports urges PPP model improvements for concessions and disputes

2023-08-17

Adani Ports and Special Economic Zone (SEZ) has underscored the significance of extending concession periods and introducing a comprehensive dispute resolution mechanism in the Public-Private Partnership (PPP) model for infrastructure projects. These recommendations were voiced by Subrat Tripathy, CEO (Ports) of Adani Ports and SEZ, during the roadshow of the 3rd Global Maritime India Summit 2023. The proposed measures align with India's endeavours to enhance maritime infrastructure and stimulate international investments.

Tripathy highlighted the importance of offering an "extended" concession period of at least 50 years, as opposed to the existing 30-year period. He emphasised that a longer concession period would act as a stronger incentive for investors, ensuring sustainable revenues. Additionally, it would mitigate the risk of potential disruptions to the capital expenditure cycle toward the end of the concession period. Tripathy commended the West Bengal government for providing a 99-year concession period for the development of the Tajpur deep sea port, a move that garnered appreciation for its foresight.

Tripathy also stressed the necessity of incorporating a robust dispute resolution mechanism and exit policies within concession agreements. Such provisions would foster transparency, reliability, and trust among investors, creating a favourable environment for investment.

Adani Port officials reiterated the company's commitment to the Tajpur project and highlighted their anticipation for a Letter of Agreement from the West Bengal government. This agreement would pave the way for feasibility studies and environmental clearances, essential steps before proceeding with the project. The state government's efforts to secure security and other clearances are pivotal prerequisites for awarding the final agreement.

By advocating for extended concession periods and establishing a dependable dispute resolution mechanism, Adani Ports aims to enhance the attractiveness of the PPP model for infrastructure projects. These strategic recommendations align with India's objectives of fortifying its maritime infrastructure and fostering a conducive investment landscape.