Kerala govt, Adani Port sign supplementary concession agreement to fast-track Vizhinjam project

State govt decided to condone delay of five years in construction taking into consideration the three major natural disasters, namely Cyclone Ockhi, the 2018 Kerala floods and Covid

PTI07_10_2024_000231B (File) Kerala Minister for Ports V N Vasavan visits International Seaport at Vizhinjam, in Thiruvananthapuram | PTI

Kerala government and Adani Vizhinjam Port Pvt Limited signed the supplementary concession agreement for the ambitious Vizhinjam International Sea Port. The revised agreement, signed after the withdrawal of arbitration proceedings, will extend the project period of five years and will ensure the commissioning of the port by December.

After the signing of the agreement on Thursday, Kerala port minister V.N. Vasavan said the new agreements are intended to benefit the state.

While talking at the venue of the startup huddle event of Kerala Startup Mission, Vizhinjam International Sea Port MD Divya S. Iyer said the delay in the construction of the port resulted in the arbitration process. “This delay became one of the turning points in the relationship between the concessioner and the body. And as a result, there was an arbitration that was filed in front of the tribunal and we realised that unless we hold hands and look in the same direction, we are not going to be able to sail in the right path and reach our targets. And at that point of time, of course, taking due legal advice and advice from the arbitration, we decided that we are going to drop the arbitration, so we have negotiations and following the negotiations, both parties have withdrawn from the arbitration. As a result of which, we entered into a supplementary agreement,” she said.

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Iyer noted that the state decided to condone the delay of five years in construction taking into consideration the three major natural disasters, namely Cyclone Ockhi, the 2018 Kerala floods and Covid.

“We have decided to condone a five-year delay, but not without imposing a cost,” she said. “A commitment fee will be withheld from the concessionaire, with one year's fee retained by the government. The remaining four years' fees will only be refunded if the concessionaire advances the capacity augmentation of the port from 2045 to 2028.”

Iyer said that because of these developments, phases two and three of the port's development, originally scheduled for completion by 2045, will now be expedited and completed by 2028. “This accelerated timeline will drive an investment of ₹10,000 crore into Kerala, significantly boosting the state’s investment climate and setting new benchmarks for development,” she said.

Chief Minister Pinarayi Vijayan said because of the completion of phases two and three by 2028, the port’s capacity will be expanded to 30 lakh TEU (twenty-foot equivalent unit).

Capacity augmentation that will happen because of this supplementary concession will involve extensive infrastructure upgrades, including increasing the length of the quay and breakwaters. “By completion, the port will feature a breakwater extending approximately 1.1 million meters and the ability to handle five motherships simultaneously, making it the largest seaport and terminal in India,” Iyer said, while adding that coupled with state-of-the-art automation, this project promises to transform the port into a world-class maritime hub.

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