Team Blitz India
Thiruvananthapuram: The state govt has decided to give its approval to avail the viability gap funding (VGF) of Rs 818 crore allotted by the Centre for the development of the container transshipment port at Vizhinjam. The Cabinet also gave the nod to sign a tri-party agreement to develop the Vizhinjam International Harbour and decided to expedite the second and third stages of development of Vizhinjam port.
As per the new conditions, the second and third phases of the project, which were to be completed by 2045 with an investment of Rs 10,000 crore, will have to be finished by 2028. The state govt expects that completing the project 17 years before the scheduled deadline will attract huge investments. Adani Vizhinjam Port Private Limited (AVPPL) was supposed to complete the construction of the first phase of the port on December 03, 2019. However, due to natural calamities such as floods in 2018 and Cyclone Ockhi, the project was delayed.
Subsequently, AVPPL demanded a deadline extension, but Vizhinjam International Seaport Limited (VISL), a company fully-owned by the Kerala government, incorporated to implement the project, disagreed and both started arbitration proceedings. The Cabinet decided to give its approval with certain conditions as the arbitration proceedings are likely to delay the project inordinately and lead to the lapse of the viability grant funding from the centre.
AVPPL demanded Rs 3,854 crore in the arbitration claim and VISL Rs 911 crore in the counterclaim. As per the decisions. made at the meeting, both entities will have to take measures to withdraw the arbitration proceedings. It was also decided to extend the deadline for the first phase of the project conditionally to December 3, 2024. Once AVPPL agrees with the conditions framed, the govt will go ahead with the decision to sign the tripartite agreement.
