Kerala’s Congress-led UDF Government on Wednesday decided to award the contract for construction and operation of the proposed Rs7,525-crore Vizhinjam International Deep-water Multipurpose Seaport to lone bidder Adani Ports and SEZ limited under PPP model. The crucial decision is expected to lead to fruition of efforts of more than two decades for the State’s ambitious project in its capital district, Thiruvananthapuram.
“The Cabinet has decided in principle to accept the bid of the Adani group,” Chief Minister Oommen Chandy said in Thiruvananthapuram after a meeting of the Cabinet which accepted the recommendation of an empowered committee in this regard. “This Government is determined to turn this dream project into reality at any cost and under any circumstance,” he said.
The formal declaration of the project and signing of the contract between the Government and Adani Group will take place after the Election Commission accords clearance as model code of conduct is in force due to the Assembly by-poll in Aruvikkara. Sources said the poll panel might not raise any objection as the process was underway even before the by-poll was announced.
“This will be a gift to the people of the State from the Government on the Kerala Formation Day. Construction will begin on November 1 after completing all formalities,” said Excise Minister K Babu, who also holds the portfolio of Ports. The Government decided to award the contract to the Adani Group disregarding the objections raised by the CPI(M)-led Opposition lDF.
“The Opposition’s objections are aimed at sabotaging the project. Kerala has suffered many losses due to controversies. We cannot afford to suffer such losses anymore. The new generation doesn’t want that,” the Chief Minister said. “I am ready to take any blame for the sake of this project,” he added.
The Government had held an all-party meet on June 3 on the project after the Opposition raised objections. However, there was no consensus. The Opposition had alleged large-scale corruption behind the decision to award the port contract to Adani Group and the “secret” meeting between Chandy and group chairman Gautam Adani was proof of this.
On Wednesday, Opposition leader VS Achuthanandan alleged that there was corruption to the tune of Rs 300 crore in the Vizhinjam port project, which has become a big discussion point in the campaigning for by-poll in Aruvikkara. The Aruvikkara Assembly seat falls in Thiruvananthapuram district where the project is to come up.
The project is now finally moving towards a construction contract after several kinds of problems which stalled it for over two decades. In the last tender process for the project, Adani Group was the only bidder and the empowered committee - and now the Government - decided to grant the contract to it without altering the conditions.
As per the terms, the port, conceived as a PPP, is not being leased out to the Adani Group but it will get the licence to operate. The project would take four years for completion of construction and the Government would begin to receive revenue from the commercial sector from the seventh year of operation, the Chief Minister said.
The operator will have to give one-per cent revenue share to the Government per year from the 15th year of operation. This revenue share can go up to 40 percent with increase every successive year. As per the terms, the Adani Group will get licence to run the port for 40 years and it can run it for another 20 years if own money is used for further port development.