The state government has decided to explore the possibility of obtaining maximum financial assistance from the Centre for the Vizhinjam container transshipment terminal project.
The empowered committee for the multi-crore port project headed by the Chief Secretary will soon meet to discuss the issue before placing the proposals before the Centre, Ports Minister K Babu said. ‘’We are trying to get between Rs 600 crore and Rs 1,000 crore as Viability Gap Funding (VGF) from the Centre. For this, modifications will have to be made to the existing financial model. We will not get the expected VGF as per the present financial model,’’ Babu said. ‘’The new proposal will be placed before the Centre after the empowered committee and then the Cabinet approves it,’’ he said.
Phase I of the Vizhinjam project is estimated to cost Rs 4,010 crore. ‘’VGF is 40 per cent of the total project cost. Of this, the State and Centre share 20 per cent each. The idea is to restructure the financial model for the project in such a manner that we get maximum VGF for PPP,’’ A S Suresh Babu, CEO, Vizhinjam International Seaport Ltd (VISL), said. The idea to go in for VGF was mooted at a seminar on PPP in infrastructure development organised by the Planning Board recently where the Vizhinjam project was presented.
The government had applied for VGF for this project once before, but that had come to naught due to various reasons. As a matter of fact, VISL, which is overseeing the project hopes to invite global bids for the construction of the port ahead of selecting a private partner for operating the port. The earlier decision was to select the private partner first and then construct Phase I.