Tripartite MoU signed for VGF of Rs. 817.80 crores for Vizhinjam port

The union government, a bank consortium and Adani Ports Pvt Ltd, which manages the Vizhinjam deep-sea port, inked a tripartite Memorandum of Understanding (MoU) for providing Viability Gap Funding (VGF) of Rs 817.80 crore to the project. Besides that, the Centre and the Kerala government signed an MoU according to which the state will share 20 per cent of the revenue it gets from the port with the union government.

Kerala Minister V N Vasavan said the Vizhinjam International Seaport Ltd (VISL) is the biggest development dream of the state and the government did not want any delay in completion of the project. The minister said the first phase of the project is already completed and the commissioning will be done based on the dates available with the Prime Minister.

The Kerala government is already in talks with the PMO and they have said that the PM’s date will be awarded sooner, Vasavan said. He said the VISL has already become the number one port in the country and is also now considered one of the best in the entire world.

So far more than 250 cargo vessels have docked at the VISL, handling over 6 lakh TEUs, the minister said. He further said that the works for completing the rail and road connectivity to the port are being done on a war-footing and will be completed by 2028.

A cabinet meeting chaired by Kerala Chief Minister Pinarayi Vijayan, had decided to accept the central government’s share of Rs 817.80 crore as VGF for the port project. According to a statement from the Chief Minister’s Office, issued post the Cabinet meeting, the central government has set a condition that the state must repay the amount under the Net Present Value (NPV) model. Earlier, the Kerala government had requested the Centre to release the VGF share without conditions. However, the Union government rejected this request, stating that the Vizhinjam project could not be compared to the Outer Harbour Container project at Tuticorin Port.