M Sarita Varma
Construction of the Vizhinjam seaport in Kerala, billed as the world’s deepest multi-purpose seaport and India’s attempt to reclaim its trans-shipment cargo from Colombo, is in a spot of trouble. While work on Phase I of the project has got back on rails, surviving a stormy fortnight of blockades last month, honouring the 2019-deadline would be tough going given the man-days lost so far. The port site is 10 miles southwest of Thiruvananthapuram, Kerala’s capital. “The families of local fishermen, mostly women, had been on the warpath, stopping construction work on the seaport. The key demand is for the rehabilitation package to be rolled out at the earliest,” says A Vincent, Congress MLA from Kovalam constituency. The Vizhinjam port is being developed on a design, build, finance, operate and transfer (DBFOT) basis. While the Kerala government owns the land, concessionaire Adani Ports and Special Economic Zone (APSEZ) will manage the port including the civil infrastructure and super-structure. Thirty per cent of the land would be used for real estate development. A recent notification has brought more buoy to the project. The Centre has designated Vizhinjam, along with Mundra port, as an immigration check-post for international ships and cruises entering and exiting India.
While its total cost is estimated at Rs 7,525 crore, the cost of the project awarded to APSEZ is Rs 4,089 crore. Of this, 40% or
Rs 1,635 crore would be funded by the Centre’s Viability Gap Funding (VGF) scheme — Vizhinjam is the first port to get VGF backing. Phase I involves construction of berth length (800 m), and a container yard (131 acres). According to Noushad Khan, a project contractor, “building the 3.1-km-long breakwater is the key part of Phase I. About 650 m is complete and it is slow progress because of the heavy undercurrents”. Gautam Adani, chairman of Adani Group, had announced in August, 2015 that Phase I would be completed within 1,000 days of the start of work — this happened in December, 2015. Further, APSEZ is contractually committed to this deadline. Significantly, the breakwater at Vizhinjam is billed as a construction challenge, making it difficult to recover the man-days lost due to blockades.
The promoters heaved a sigh of relief when the Kerala government rushed in after protests broke out last month. Talks on November 3 saw the situation being defused. “The state government has assured the protesters that the compensation claims of those displaced due to the project will be settled before November 30,” says Thiruvananthapuram District Collector K Vasuki.
This is not the first time the project has run into controversies. In its 2016 report, the Comptroller and Auditor General had pointed out that the Vizhinjam MoU would ensure undue gains for the Adani Group — the state, to be fair, did not have much choice on the contract since APSEZ was the sole bidder. Second, it is not going to be the job-spinner it was touted as and has invited protests from fishermen whose livelihoods are threatened.
Yet, the Pinarayi Vijayan government in Kerala sees Vizhinjam as a game-changer — the MoU was signed by its predecessor UDF regime — given its proximity to the international east-west shipping route, natural draft depth (18.4 m) that would minimise dredging costs and savings likely on import and export costs. It is envisaged to handle 4.1 million containers annually and would allow ultra-large ships of 18,000-TEU capacity to dock once completed.