The Kerala government is planning to take an immediate loan of Rs 400 crore in order to pay the Adani Group for the construction of the breakwater at the ongoing Vizhinjam port.
According to the agreement between the two, Kerala government will have to provide Adani Ports Rs 400 crore when 30 per cent of the breakwater is completed and Adani group have been knocking on the doors of the government for a while.
The state government has been caught in a debt trap and the financial position has been in tatters and hence they are unable to honour the commitment to the port builder. With time running out, the Pinarayi Vijayan government has now decided to avail a loan of Rs 400 crore from Housing and Urban Development Corporation (HUDCO).
HUDCO is a consortium of cooperative banks. Discussions are happening on the matter.
A total of Rs 1000 crore is required for the completion of the Vizhinjam project and another Rs 1000 crore for the construction of Vizhinjam-Balaramapuram railway lane.
The Vizhinjam port
The Vizhinjam port has been a dream project of successive governments and was finally cleared by the then Oommen Chandy government (2011-16) and Adani Ports was the lone bidder for the project.
The work began on December 5, 2015. Gautam Adani had then announced that the first ship will berth there on September 1, 2018, in a record time of less than 1,000 days, but due to various reasons things went haywire.
State Ports Minister Ahamed Devarkovil has now said that the first ship will berth in March 2023 and the first phase of the port will be commissioned in 2023.
Cyclone Ockhi
The project first stalled in 2017 after cyclone Ockhi hit the construction site and a portion of the constructed breakwater was washed away and since then the shortage of limestone, the most important raw material for the project, caused another delay.
The total cost of the port project is Rs 7,525 crore and the state government has contributed 500 acres of land.
Adani Ports
According to the plan, once completed, this would be one of India's deepest ports and 80 per cent of the country's cargo trans-shipments will go through here.
Adani Ports is developing the Vizhinjam International Deepwater Multipurpose Seaport in Kerala. | Image: Adani Group 2012
Adani Ports, which was the lone bidder for the project, had sought a Rs 1,635 crore grant for the construction purposes.
According to the agreement, Adani will operate the port for 40 years, extendable by 20 more years, while the state government will get a portion of the revenue from the port after 15 years.
