Kerala may go slow on Adani port project

By: | Published: July 8, 2015 12:06 AM

Kerala is once again poised to lose momentum in implementing the Vizhinjam international seaport project as the letter awarding the contract for developing the Rs 7,525-crore port to Adani Group is yet to be handed over, due to pressures within the Congress-led state government.

Kerala is once again poised to lose momentum in implementing the Vizhinjam international seaport project as the letter awarding the contract for developing the Rs 7,525-crore port to Adani Group is yet to be handed over, due to pressures within the Congress-led state government.

State ports minister K Babu had announced that the MoU between the Kerala government and the Ahmedabad-based multi-port operator Adani Ports and Special Economic Zone (APSEZ) would be signed soon. As the port operator, APSEZ had sought R1,635 crore as grant for the project partnering the state.

Phase-1 is estimated to cost R7,525 crore, of which the PPP will shoulder R4,089 crore. Of this, 40% will be the VGF (viability gap funding) share of the Centre and the state government. This was agreed, in principle, and Congress even scored victory in a by-poll on the promise that the infrastructure project will be underway by November 1, 2015.

Accordingly, last week, the state cabinet had decided to go ahead with the contract. The letter of contract was ready by Friday last week. However, even on Tuesday, the letter of contract is yet to change hands. The official reason cited is that there are some “technical and procedural delays”.

Chief minister Oommen Chandy, who was in New Delhi during the weekend, was reportedly advised by the Congress high command that it was not proper to award such a big project to Adani in a Congress-run state like Kerala. Since Adani Group is perceived to be closer to the ruling BJP government in Centre, it would be politically awkward for the Congress to face criticism on roping in Adani Group.

In New Delhi, Chandy had also met Congress vice-president Rahul Gandhi who had criticised Adani in Parliament many times.

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