Demand to Cancel PPP Bid - The New Indian Express

Demand to Cancel PPP Bid

Published: 07th January 2014 10:01 AM

Last Updated: 07th January 2014 10:01 AM

Former ports minister M Vijayakumar has demanded that the state government should cancel the Public Private Partnership (PPP) bid floated for the Vizhinjam seaport project. The PPP model would destroy the potential of the proposed port, he said.

In a statement here, Vijayakumar, who was Ports Minister for the better part of the LDF term, said that previous governments had floated PPP bids thrice for this project but failed to land a partner. It was against this backdrop that the previous LDF government had appointed International Finance Corporation (IFC) as project consultant and settled for the ‘Landlord Model’ for implementing the port project.

In this model, the state government would have had full control of the port while the private partner ran it. The LDF government had also completed procedures for amassing funds for the project through a consortium of banks, Vijayakumar said. But the LDF government could not start construction works because L&T-Ramboll had not submitted the Environmental Impact Assessment (EIA) report, he said, adding that the UDF - on coming to power - had removed IFC from the consultant’s post.

‘’The only thing the UDF government did was to submit L&T-Ramboll’s EIA report to the Centre,’’ Vijayakumar alleged. The UDF also scuttled the ‘Landlord Model’ and decided to replace it with the PPP model. ‘’The UDF government promises Rs 1,000 crore as Viability Gap Funding (VGF). But there is no official confirmation on VGF so far. Besides, if the VGF is indeed provided by the Centre, the port tariff will be decided by the Tariff Authority for Major Ports. This will kill the competitive edge that Vizhinjam would have had, had it been a Landlord Port. In the latter case, the state government would have had the freedom to decide the tariff,’’ he said.

While the Centre had earlier denied the Adani Group clearance when it bid for the Vizhinjam project, the same Centre has now cleared the group for tasking up three other port works, Vijayakumar said.

‘’The state government, on its part, while claiming that tenders have been floated for selection of private partner and construction of the port, is also understood to have invited bids for a consultant. This is mysterious and involves foul play,’’ he alleged.

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