The Kerala state Government and Adani Vizhinjam Port have signed a supplementary concession agreement, advancing the expansion of Vizhinjam International Seaport.
The agreement entails an additional investment of approximately Rs100bn ($1.3bn), enhancing the port’s capacity to handle up to three million twenty-foot equivalent units (TEU).
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The first phase of the project is expected to be commissioned next month, with the subsequent phases to be completed by 2028, reported The Press Trust of India.
The project’s timeline has been extended by five years, considering the impact of the Covid-19 pandemic, the Ockhi cyclone, and other floods.
A penalty of approximately Rs2.19bn ($29m) has been levied due to the delays, with around Rs438m ($5.8m) to be paid to the state. The balance will be retained until the project’s completion in 2028.
Under the previous agreement, the government was to receive revenue shares from the 15th year of the port’s operations. However, the revised terms promise earlier financial benefits.
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By GlobalDataThe state government has committed approximately Rs55.95bn ($744m), of the Rs88.67bn ($1.18bn) required for the project, towards various aspects including Viability Gap Funding, infrastructure, and compensation for affected livelihoods.
To date, the state has spent over Rs21.59bn ($287m) of its contribution. Adani’s investment stands at approximately Rs24.54bn ($326m), while the central government’s share of Rs8.17bn ($109m) is pending receipt, as per Kerala Port Minister V N Vasavan’s statement.
Vasavan said: “However, since the construction of all phases is expected to be completed by 2028, the profit share from the total revenue, once all four phases are operational, will be provided by the Adani Company to the government starting in 2034.”
In 2022, Adani Ports & SEZ (APSEZ) secured the Rs11bn ($130m) bid for Karaikal Port in Puducherry. This deal will allow APSEZ to strengthen its presence along India’s eastern coast.
