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Adani Ports, Kerala ink MoU for Rs 7,525-cr Vizhinjam seaport

The port is only 12 km from the international shipping route

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M&A deals struck during the quarter were recorded at 233 deals worth $6.79 billion. Compared to Q3 CY2014, deal volume declined 9% while deal value increased by a healthy 31%.

Adani Ports and the Kerala government have signed an MoU for the proposed Rs 7,525-crore Vizhinjam deep sea international terminal and port, 25 years after the project was first mooted. The central government will also participate in the infrastructure project, to be completed in three phases.

“We are confident of completing Phase I in about two years, though the estimated time schedule for the implementation of the initial phase, is as long as four years,” Gautam Adani, chairman, Adani Group said, after Kerala’s ports secretary James Varghese and Adani Vizhinjam Port Private CEO Santhosh Kumar Mohapatra signed the pact. The PM is set to lay the foundation stone of the project on November 1, Kerala’s formation day.

For the Rs 5,552 crore first phase, the state will have to put together about Rs 3,660 crore.  “Lack of funds will not stand in the way of implementation of the project. For the right, viable project, there are plenty of backers, ready to pitch in the money,” CM Oommen Chandy said. Viability gap funding from the Centre is Rs 818 crore.

Once completed, the port would enable ships with a capacity of even 18,000 TEU (20-feet equivalent units) to dock.

The proposed port, located close to the busy international shipping route, is envisaged to handle 4.1 million containers annually. The main advantage of Vizhinjam port is that it enjoys a natural draft of 16 to 20 feet depth, minimising the recurrent dredging costs. Secondly, the port is only 12 km from the international shipping route.

“The first major task would be to build a long breakwater to create the port’s tranquillity zone,” said Santosh Kumar Mohapatra, who will implement the project. “Viability of the project would depend on re-aligning container traffic from Colombo port, rather than getting cargo business from the hinterland.  Jawaharlal Nehru Port Trust in Mumbai took almost seven years to emerge viable,” he pointed out.

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