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India's biggest port project preparing to set sail

Posted on 11 Jun 2015
"Kerala has suffered a lot due to controversies and the state has to do justice to the new generation. This has forced the government to act for the dream project" - Ommen Chandy (Kerala Chief Minister)

The Letter of Award (LoA), the first communication from the State government to Adani Ports and Special Economic Zone Ltd. (APSEZ), the private multi-port operator which been selected to build the superstructure and operate the Vizhinjam International Multi-Purpose Seaport, will be issued once the Election Commission (EC) gives its approval.

The LoA will inform the Ahmedabad-based APSEZ that it has been selected for the project and should form a special purpose vehicle (SPV) and give Rs.120 crore as security before signing the concession agreement with the government.

Official sources in the Port Department said Chief Secretary Jiji Thomson had written to the Chief Electoral Officer on Wednesday noon seeking nod for going ahead with the project.

To expedite the take-off of the Mission 676 project, the government has decided to give the LoA once the nod of the Election Commission is obtained. As per the draft concession agreement, the LoA has to be issued within one month to the selected concessionaire.

Officials said time was needed for completing formalities and expressed hope that the project work would kick-off on November 1, Kerala formation day, as announced by Minister for Ports K. Babu.

In another move to ensure transparency, the government published the bid submitted by the APSEZ on the website of VISL after the Cabinet gave its approval.

Mr. Babu said the decision was taken on the basis of legal opinion. With this, all documents relating to the project had been made public.

Adequate measures have been taken to protect the State’s interests with regard to revenue share, port estate development, maintenance, and dredging.

“Not even a single cent of land is sold or leased out,” Chief Minister Oommen Chandy said, adding that the selected private port operator would be given the licence to build and operate by the government.

This would be for 40 years and include four years for construction. The port operator would have to give a share of the total income ranging from 1 per cent from the 15th anniversary of commercial operations of the port and going up to 40 per cent.

Meanwhile, 90 per cent of the 92.75 hectares of land needed for the project as per the draft concession agreement (DCA) has been acquired.

Port estate development will be limited to 30 per cent of the total area of the site.

For rail connectivity, a 17.05-km railway line has to be laid from the Thiruvananthapuram-Kanyakumari line to Vizhinjam.

The railway link to the port will be from Nemom. Rail connectivity to the seaport is needed only from the sixth year as per the draft DCA.

Land for a 2-km road from Thalakkod, 400 metres from Mukkola on the Kazhakuttam-Karode National Highway-66 bypass, to the port has been acquired.

Praise for officials

Mr. Chandy said it was the teamwork by officials led by Ports Principal Secretary James Varghese, VISL CEO and MD A.S. Suresh Babu, successive Chief Secretaries, Planning Board Vice-Chairman K.M. Chandrasekhar, and people’s support that helped the government make the project a reality after 24 years.

Source : The Hindu