Model Concession Agreement (MCA) was in news recently as Cabinet Committee on Economic Affairs (CCEA) on 27 August 2014 empowered the Road Transport And Highways Ministry to amend Model Concession Agreement (MCA).
Model Concession Agreement
• MCA is a legal contract that forms the basis of public private partnership (PPP) projects in India.
• It lays down the terms and conditions for executing a road project till a private firm operates.
• It states the policy and regulatory framework for implementation of a PPP project.
• MCA addresses all the critical issues related to a PPP framework like mitigation and unbundling of risks; allocation of risks and returns; symmetry of obligations between the principal parties; precision and predictability of costs & obligations; reduction of transaction costs and termination.
• MCA assigns all the risks to the best suitable parties which can manage those risks.
• The Model Concession Agreements for various sectors like National Highways, State Highways, Urban Rail Transit System and Ports are available.