THIRUVANANTHAPURAM: The Cabinet on Tuesday approved a proposal for funding the first phase of the Vizhinjam international transhipment terminal project by a consortium led by State Bank of Travancore (SBT).

Chief Minister V.S. Achuthanandan told the media after a Cabinet meeting that Rs.2,500 crore would be raised for the project. SBT would liaison with other banks and financial agencies joining the consortium on the quantum of loans to be provided by each of them.

Later, Ports Minister V. Surendran Pillai told a press conference that the project would be implemented by Vizhinjam International Seaport Limited under direct control of the government. Besides SBT, Dhanlaxmi Bank, South Indian Bank, Federal Bank, State Bank of India and other financial agencies may provide the loans.

Of the Rs.2,500, as much as Rs.1,600 crore would be spent for development of the port and Rs.900 crore for the terminal and associated facilities.

“Work on the project will be started in March next year after completing various formalities.”

The Minister said the Cabinet had decided to request the Centre to grant the status of Special Economic Zone (SEZ) to the port area and the hinterland.

Mr. Surendran Pillai said the government would invite ‘requests for qualification' for selection of a port operator on November 25.

The technical details and design of the port were to be finalised in consultation with the port operator.

It was expected that the port operators could be shortlisted by January 2011. This would be followed by a request for technical and financial proposal from the shortlisted companies. Security clearance for the selected operator and environmental clearance were expected to be obtained by March.

The loan raised for the project would be repayable over 15 to 20 years after an initial moratorium of three years. The government would stand guarantee to the loan and provide a budget support of Rs.200 crore to Rs.250 crore for repayment.

The government had started acquisition of 120 hectares required for the project.

Orders had been issued for acquisition of 43 hectares for a truck terminal and backup area.

Road and rail connectivity and electricity and water supply were expected to be ready by February next. The first phase of the project could then be commissioned in three years.

The Minister said that talks held with the Shipping Corporation of India for participation in the project had not yielded results so far. The corporation could decide to join the project before November 25 or bid for appointment as port operator thereafter.

Source : The Hindu