The Indian state of Kerala has approved a funding proposal for the first phase of the Vizhinjam international transhipment terminal project in the region.

Under the proposal, a State Bank of Travancore-led consortium will raise about INR25,000m ($552.9m) for the project.

Of the total amount raised, about INR16,000m ($353.9m) will be earmarked for the development of the port and the rest will be put towards the terminal and associated facilities.

Some of the members in the consortium include Dhanlaxmi Bank, South Indian Bank, Federal Bank and State Bank of India.

The government will provide a loan of INR2500m ($55m).

Bids from companies will be invited by the end of this month to select a port operator and could be shortlisted by January 2011.

The port area could also be granted Special Economic Zone status following the approval from the government.

Work on the project will begin in March 2011.