Vizhinjam Seaport notches R800 crore from VGF kitty

Written by fe Bureau | Thiruvananthapuram | Updated: Oct 30 2014, 08:28am hrs
The Centre on Wednesday cleared the Viability Gap Fund (VGF) assistance worth Rs 800 crore for the Rs 6,595-crore Vizhinjam Seaport, thus, paving the way for the seaport's smoother takeoff. Vizhinjam was the first port project that is in line for VGF. The project will be entitled to a maximum assistance of 40% of the project cost. Of this, the Centre will pump in 20% of the amount invested by the company.

"This would help the tender procedure for the project," Kerala port minister K Babu said. "Out of the five companies, whose bids qualified , three are willing to go ahead with financial bids. Now the bidding process can be expediated in a week or two," he added.

Earlier, the empowered institution under the Union finance ministry had given in-principle clearance to Vizhinjam port's VGF application. Rajiv Mehrishi, secretary, ministry of finance, had called a meeting of Kerala chief secretary Bharat Bhushan, principal secretary Ports James Varghese and Vizhinjam International Seaport (VISL) managing director AS Suresh Babu in Delhi on Wednesday to finalise the details of the VGF assistance.

The port development is proposed to follow the landlord port model. Accordingly, the dredging, reclamation and basic external infrastructure work like construction of break-water and quay wall will be taken up by VISL.

The proposed Vizhinjam seaport is an all-weather port located on theSouthern tip of India, just 10-12 nautical miles from the busy Persian Gulf- Malacca shipping lanes which carry almost a third of the world shipping traffic. The proposed site is endowed with natural depth of more than 20 m as close as one nautical mile from the coast. This means that the dredging and maintenence costs will be minimal.