MoRTH Revises Model Concession Agreement for Multi Modal Logistics Parks

The Ministry of Road Transport and Highways (MoRTH), vide Office Memorandum no. NH-11014/98/2025-HA dated March 16, 2026, has notified revisions to the Model Concession Agreement (MCA) for Multi Modal Logistics Park (MMLP) projects following detailed deliberations by an Inter-Ministerial Committee comprising representatives from inter alia, MoRTH, NITI Aayog, the Department of Economic Affairs incorporating feedbacks received from the stakeholders. The revised framework represents a significant contractual update intended to address implementation challenges faced in earlier logistics park projects and to strengthen the bankability and execution readiness of future concessions.

The revisions assume particular importance in the context of the Government’s plan to develop approximately 35 MMLPs across key high-freight movement corridors through a Public-Private Partnership (PPP) structure on a Design-Build-Finance-Operate-Transfer (DBFOT) basis, as part of its strategy to reduce logistics costs and strengthen multimodal connectivity. In this context, the revised MCA reflects a shift towards a more performance-oriented and implementation-focused contractual framework, particularly in relation to risk allocation, dispute resolution timelines, land-related provisions and monitoring mechanisms.

The revised MCA prescribes a revised concession period of 45 years from the appointed date, covering the entire lifecycle of development, operation and transfer of the project. This represents a departure from the shorter concession horizon of 30 years with extension contingencies and is intended to align the concession tenure with the phased development model of MMLPs, thereby ensuring a longer and more predictable revenue realisation period.

A key feature of the revised framework is its emphasis on improving ease of doing business for private concessionaires, refining revenue-sharing structures, strengthening termination provisions and clarifying land-leasing arrangements—areas that historically influenced project bankability and investor participation in logistics infrastructure PPPs.

The revised MCA outlines a detailed Key Performance Indicator (KPI) framework prescribing measurable operational benchmarks, including the following:

1. Freight train turnaround time;
2. Crane productivity (moves per container);
3. Vehicle dwell time, with caps such as approximately 30 minutes for gate processing and 3 hours for cargo handling.

Non-compliance with prescribed KPI thresholds attracts liquidated damages quantified at 0.1% of revenue for each instance of default, thereby embedding financial consequences directly into operational performance. This marks a shift towards quantifiable, enforceable performance obligations, rather than broadly defined service standards.

The revised MCA expands the role of the Independent Expert to include:

1. Review and certification of design and construction progress;
2. Monitoring of financial and operational performance;
3. Verification of compliance with contractual milestones; and
4. Assistance in dispute resolution processes.

The Independent Expert is required to provide periodic reports, thereby functioning as a continuous compliance and monitoring authority throughout the concession period.

The revised MCA introduces a streamlined and value-based dispute resolution framework under Article 43, structured as follows:

1. Mandatory amicable resolution stage between the Authority and the Concessionaire as a pre-condition to formal proceedings;
2. Disputes involving an amount less than ₹10 crore are to be referred to institutional arbitration, including recognised forums such as:

1. Society for Affordable Redressal of Disputes (SAROD); or
2. India International Arbitration Centre (IIAC);

1. Disputes involving an amount equal to or exceeding ₹10 crore are to be adjudicated before competent civil courts, rather than through arbitration.
2. The revised framework notably dispenses with the Dispute Resolution Board (DRB) mechanism, thereby removing an intermediate adjudicatory layer.

This structure introduces clear jurisdictional thresholds, reduces procedural fragmentation, and is intended to expedite dispute resolution by directing disputes to predefined forums based on value.

The revised MCA also incorporates provisions requiring the concessionaire to deploy IT-enabled systems for real-time monitoring, reporting and data exchange, along with compliance with applicable data privacy standards, environmental protection measures and safety requirements. This reflects an increased emphasis on digitised infrastructure management, enabling transparency, auditability and improved operational oversight.

Overall, the revised MCA reflects a more structured and performance-driven concession framework for Multi Modal Logistics Park projects and is expected to enhance project bankability while supporting the timely development of logistics infrastructure critical to improving freight efficiency and multimodal connectivity.