Cabotage Law Barrier to the Vizhinjam Bids

Published: 26th February 2015 06:00 AM  |   Last Updated: 26th February 2015 06:00 AM   |  A+A-

THIRUVANANTHAPURAM: Giving clear indications that cabotage may prove costly for the proposed Vizhinjam International Container Transshipment project, the Adani Group, one of the bidders, has raised concerns on the same with the state government.Chief Minister Oommen Chandy, who held discussions with the group on Tuesday, disclosed that they have raised concerns on lack of clarity surrounding relaxation of cabotage law.

“The state government has promised  us that we would get relaxation in cabotage law for the project. The government has already taken up the issue with the Centre twice. The issue was again raised recently when we met Prime Minister Narendra Modi. He was positive in his response,” Chandy said on Wednesday. He added that relaxation on cabotage would come to play only  when the project is commissioned.Chandy held talks with the Adani Group after the Vizhinjam seaport project failed to attract bidders.

Cabotage.jpgFollowing a board meeting on Tuesday, it was decided that the Chief Minister, who is also the chairman of the Vizhinjam International Seaport Ltd, would speak to the top officials of the companies in the race. It was also decided that after the Chief Minister held talks with  the companies, the government would hold a pre-bid meeting either in New Delhi or Mumbai. The attempt was to understand what their reservations are regarding the project. “We were confident that  more than one company would turn up for the bid. But we were surprised when no one turned up. That’s why we decided to address their concerns. We have also extended the bid submission date,” Chandy said.

Three of the five shortlisted companies - Adani Group, Essar Ports and the consortium Srei Infrastructure and OHL - purchased the bid documents but had failed to bid. Chandy was mum when asked whether it was a collective move by the three companies.

Meanwhile, with the Adani Group raising concerns on cabotage law, there are doubts whether there’s adeliberate attempt to sabotage the project. Sources said it could be a pressure tactic from the company.“The cabotage norm is relevant only after the project is commissioned.It should be suspected whether there’s an attempt from some parts to sabotage the mega project,” they said.

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