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LDF express misgivings about project granting to Andani, Govt calls for all party meeting.

Posted on 20 May 2015

THIRUVANANTHAPURAM, MAY 20: The State Cabinet has decided to postpone a decision on awarding the Vizhinjam mega port project to Adani Ports and SEZ till an all-party convened here on June 3.

The Adanis were the sole bidder for the project whose first phase is expected to cost ₹7,525 crore. The PPP component alone amounts to ₹4,089 crore with a grant ₹1,635 crore sought by the bidder.

A subsequent meeting of the Cabinet to be held on June 10 is expected to take a final decision after consultations with the Opposition.

LDF misgivings

The decision to call for the meeting was taken in the context of the Left Democratic Front expressing misgivings about the project specifics.

Earlier, the director board of the Vizhinjam International Ports Ltd had recommended to the Cabinet Adani’s bid to build and operate the project in PPP mode.

CPI(M) leader Pinarayi Vijayan had taken exception to the ‘hush-hush’ manner in which the government was proceeding to hand over the project.

He wanted the government to come clean on the nature of closed-door negotiations the Chief Minister was alleged to have engaged in with the Adanis.

Meanwhile, promoters Vizhinjam International Seaport Ltd has clarified that neither has the bidder been allowed to put any conditions nor has it done anything in contravention while submitting the bid.

Tender conditions had suggested just one bid parameter, that the bid with the highest premium offer or that with the lowest grant component, would be selected.

Change of terms

According to the latest draft concession agreement, maintenance dredging, if necessary, would be undertaken by the port operator at its own expense.

This is a significant change from the previous tender in which the job was sought to be forced on the State government.

The selected operator will be granted a licence to build and operate the port for a period of 40 years. This too is at variance with the earlier model in which land would be leased out for 30 years after construction.

Similarly, there was no provision for a revenue sharing earlier. But the extent model provides for a share from the port operator’s revenue starting from the 16{+t}{+h} year of operation.

This will be payable at one per cent, two per cent, three per cent and up to 40 per cent during subsequent years of operation.

Source : The Hindu ,Business Line