A decision on the single-operator bid Vizhinjam international port and deepwater container terminal will be delayed further. This became clear after the Kerala Government set up a high-level committee to ‘negotiate’ terms cited by the bid-winning consortium led by Welspun Infratech.
The consortium had sought a grant of Rs.479.54 crore from the State Government over an initial period of 16 years. As the private partner selected to run the terminal, it would have been required to contribute up front Rs 970 crore to erect the cargo superstructure, including cranes.
The high-level committee would now negotiate with the consortium to scale down the extent of the grant. It will comprise the expenditure, ports and law secretaries of the State and the Managing Director of Vizhinjam International Seaport Ltd (VISL), a special purpose vehicle.
The panel will negotiate with the consortium of Welspun Infratech, Welspun Corp and Leighton Welspun Contractors (India). After the negotiations, it will submit its report to the Cabinet for further consideration.
Meanwhile, a top port sector analyst told Business Line that the ‘grant element’ may not be the best advertisement for such a project.
The first phase of the multi-thousand-crore project is estimated to require an investment of Rs 4,010 crore. The State Government will invest Rs 3,040 crore to build basic infrastructure as part of its commitment to the ‘landlord’ port.
Mr A. S. Suresh Babu, Managing Director of VISL, had earlier told Business Line that all options were open before it.
There was no going back on the stated objective of laying the basic port infrastructure, which could be a major attraction for any prospective investor. But he would not speculate on whether the state would go for a fresh bidding, in case if negotiations with VISL were to break down.
The multipurpose port at Vizhinjam will have a capacity to load 2.8 million standard containers and 1.8 million tonnes of other cargo a year.