Vizhinjam: Panel rejects Welspun demand for grant

Published: 26th July 2012 12:28 PM  |   Last Updated: 26th July 2012 12:28 PM   |  A+A-

The Chief Secretary-led empowered committee has rejected Welspun consortium’s demand for grant for the proposed Vizhinjam International Container Transshipment Terminal project.

The committee has recommended that Welspun’s proposal be entertained only if it extends a ‘no grant’ proposal, that is, minus the grant.

If not, the State Government should float fresh global tenders for the multi-crore project, according to the committee.

‘’We have rejected the consortium’s demand for a grant. If needed, we will go in for fresh bids,’’ Ports Minister K Babu said.

The consortium of Welspun Infratech, Welspun Corp and Leighton had initially demanded Rs 479.5 crore spread over 16 years of the 30-year concession period for operating the port. Since this was not acceptable to the government, Welspun was asked to submit a better proposal.

Welspun finally cut the grant amount by Rs 80 crore to Rs 399.5 crore. After that, the Bid Negotiation Committee had handed over the matter to the empowered committee.

After the Union Home Affairs Ministry declined to clear Mundra Ports and SEZ Ltd, Welspun had emerged as the sole bidder.

 If indeed the government decides to invite fresh global tenders, it has two options before it. It can do so promptly, or wait until after Phase I of the port is constructed to select the port operator.

There is increasing support in the bureaucratic circles for the latter option. The Vizhinjam International Seaport Ltd (VISL) is gearing up to float the Engineering, Procurement and Construction (EPC) bids for constructing the port after the EIA procedures are over.

‘Amenable to Decision’

Reacting to the decision, advisor to the Welspun consortium Anil Thampi said that Welspun was amenable to the decision, provided the State Government sanctioned a ‘working grant’ initially.

‘’This will be repaid in full without causing any financial liability to the state,’’ he said.


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