Model Tripartite Agreement (MTA) for Road Sector PPP Projects

The Empowered Inter-Ministerial Group (IMG) constituted by the Cabinet Committee on Infrastructure (CCI), has under the Chairmanship of Secretary, Economic Affairs, in its meeting recently approved the Model Tripartite Agreement (MTA), for take-out financing of PPP projects in Ports Sector.

The salient features of the MTA are:                      

• A body corporate constituted under the provisions of the Major Port Trusts Act, [1963], and having its principal administrative office at referred to as the “Concessioning Authority” which expression shall, unless repugnant to the context or meaning thereof, include its administrators, successors and assigns.
• A company registered under the Companies Act, 1956, acting, duly authorised by the resolution passed at the meeting of its Board of Directors and having its registered office hereinafter referred to as the “Concessionaire”.
• Provisions of this Agreement, issue Bonds for the amounts subscribed by the Debt Fund; provided that the total value of such Bonds shall not exceed 94% (ninety four percent) of compensation payment from the Concessioning Authority on day of signing this Tripartite Agreement.
• The tenor of the Bonds, in accordance with the provisions of this Agreement shall be such that at least 50% (fifty per cent) and 75% (seventy five per cent) of the total nominal value thereof shall be fully redeemed by the Concessionaire no later than the expiry of 75% (seventy five per cent) and 85% (eighty five per cent) of the Concession Period respectively and the balance, if any, shall be redeemed no later than 2 (two) years prior to the expiry of the Concession Period.
• The Concessionaire agrees and undertakes that upon completion of the tenor of the Bonds, it shall redeem the same by making full and complete payment of the outstanding principle and the interest thereon.
• The Parties agree and confirm that in the event of default in Debt Service by the Concessionaire, the Lenders shall have the right to enforce termination of the Concession Agreement in terms of Clause [15.1(a)(xi)] and [17] of the Concession Agreement, whichinter alia requires the Concessioning Authority to pay compensation in accordance with the provisions of the Concession Agreement.
• This Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms hereof, and its obligations under this Agreement will be legally valid, binding and obligations enforceable against it in accordance with its terms.

The annexure is attached herewith for your ready reference.

Warm regards,

Dr. S P Sharma

Chief Economist