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Financial bid for Vizhinjam Port


Posted on 04 Feb 2012

The only contender left in the fray for assuming the role of the port operator for the Vizhinjam Port, a consortium led by Welspun Infratech Limited (India), has, in its financial bid, requested a grant of Rs.479.54 crore spread over 16 years from the State Government to participate in the project. The grant is in present value terms.

Vizhinjam International Seaport Limited (VISL), a fully-owned company of the State Government set up to facilitate the port project, opened the financial bid on Monday.

The concession period for the bid is 30 years and the revised cost of this dream project is Rs.4,010 crore. Out of this, the port operator is required to bring in Rs.970 crore.

In other words, the consortium, if the bid is accepted, will have to invest Rs.970 crore on the superstructure of the port, but will receive Rs.479.54 crore as grant from the State government towards operating expenses over 16 years. The port operator can operate the port for 30 years, after which it has to be handed over to the State Government.

Managing Director and Chief Executive Officer of VISL, A. S. Suresh Babu, said the bid evaluation report from the advisors would be put up to the empowered committee under the chairmanship of the Chief Secretary and the recommendations of the committee would be forwarded to the government to take a decision.

VISL was expecting to receive the evaluation report from the project advisors by the end of this week, he said.

The project is conceived in the “landlord model.” The State Government is building the port infrastructure. Building the port superstructure is the responsibility of the port operator, who will promote the business of the port, handle its operations and enjoy the revenue from it for a period of 30 years.

Fourteen firms/consortiums, including the Shipping Corporation of India, had initially shown interest in the project, but only a consortium led by Welspun Infratech and another led by Adani Ports (formerly Mundra Ports) lasted beyond the stage of submission and evaluation of technical bids.

The Union Home Ministry, however, did not give its clearance for considering the bid of Adani Ports.