Adani Ports will not be allowed 18 months extension to the deadline for the completion of the Phase I of Rs 7,525-crore Vizhinjam Seaport, according to Kerala port minister Kadannappaly Ramachandran.
Adani Ports will not be allowed 18 months extension to the deadline for the completion of the Phase I of Rs 7,525-crore Vizhinjam Seaport, according to Kerala port minister Kadannappaly Ramachandran. If the December 2019 deadline is violated, the infrastructure company would have to cough up the contractual compensation. “At the same time, the LDF government would be ready to give the port developing partner company all assistance and support that is essential to accomplish the tasks in time,” the minister clarified.
The Pinarayi Vijayan government in Kerala was driven to the wall on Assembly floor this week by Opposition Congress-led UDF over any possible soft spot for Adani Group, after Adani Ports sought extension of deadline by 18 months. By the contract signed under the former Oommen Chandy government on August 17, 2015, Adani Group is committed to commission the port on December 5, 2019. If this deadline is violated, the company will have to pay a compensation at the rate of Rs 12 lakh for each day of delay.
“Last month, state’s port minister Kadannappally Ramachandran had told the Assembly that the work at the port was likely to be delayed because of the damages caused by Ockhi cyclone and the non-availability of limestone. It became obvious that LDF was playing cahoots with Adani Group since within a week of the state minister’s statement, Adani Ports sent a request urging that the deadline is deferred by 18 months,” M Vincent, Congress legislator of Kovalam constituency, where the port is under development, alleged. It is in response to this charge that the state port minister stated that the deadline violation would invoke the penalty clause.
There is also an argument that since the project delay is due to a natural calamity, the compensation clause might not be invoked. Meanwhile, Adani Vizhinjam Port CEO Rajesh Jha has clarified that the company asked for extension of deadline, not to escape from paying the due compensation. “At present, it is hardly possible to commit when the construction will be over,” he says.