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Kerala hands over Vizhinjam LoA to Adani Ports & SEZ

Posted on 15 Jul 2015

The Kerala government has handed over the letter of award (LoA) for the mega Vizhinjam port project to sole bidder Adani Ports & SEZ Ltd.

The document was e-mailed to Sumeet Agrawal, Senior Manager-Business Development, of the company on Monday, Chief Minister Oommen Chandy said.

Ends Speculations

This puts to rest all speculations over the delay in the handover after the state cabinet had given the go-ahead as far back as June 10.

The Adanis will now undertake development and operation/maintenance of the Vizhinjam International Deepwater Multipurpose Seaport project on PPP mode and a Design, Build, Finance, Operate and Transfer basis.

The first phase of the project involves a cost of ₹7,525-crore of which ₹1,635 crore will come in a grant component by way of viability gap funding shared equally by the state and central governments.

Adanis To Visit

The LoA requires of the Adanis to execute the concession agreement within 45 days of its receipt and furnish the performance security.

The Chief Minister said that the state government and promoters Vizhinjam International Seaport Ltd are proceeding on the assumption that work on the project would begin on November 1.

Representatives of Adani Ports & SEZ are expected to reach Thiruvananthpauram on July 20 for discussions with the government.

Chandy rubbished rumours over the delay in handover of the LoA which he attributed to restrictions imposed on publication of the terms of agreement given the size and scale of the project.

Financing Pattern

The first phase is expected to be completed over a period of four years, as per terms of the agreement.

The state government’s share will be ₹1,973 crore in land, rail connectivity, power, drinking water and land.

It will also spend another ₹2,280.2 crore for building the breakwater ₹1,463 crore and furnishing the viability gap funding share of ₹817.2 crore.

The PPP component will come to ₹4,089 crore (₹2,090 crore for super structure; ₹495 crore for civil structure; ₹945 crore for dredging reclamation; and ₹559 crore for berth).

The Adanis will need to invest ₹2,454 crore after accounting for the viability gap funding and ‘funded work’ executed by it through funds provided by the promoters on a milestone basis.

Source : The Hindu , Business LIne