THIRUVANANTHAPURAM: The Kerala government today constituted an inquiry commission to look into the Rs 7,525 crore Vizhinjam Port Project with the Guatam Adani group in the backdrop of a CAG report finding lapses in the deal.
The three-member panel would be headed by retired Kerala High Court judge Justice C N Ramachandran Nair, Chief Minister Pinarayi Vijayan told reporters here.
The decision to set up the panel under the Commissions of Enquiry Act was taken at the cabinet meeting held here following the findings by the Comptroller and Auditor General of India (CAG) that the "state's interests were not protected while signing the agreement and there were lapses."
"The cabinet today discussed the matter and it was decided to have a probe conducted by a three-member committee headed by retired judge Justice C N Ramachandran Nair," Vijayan said.
Retired IAS officer K Mohandas and former Indian Audit and Accounts Service official P J Mathew are the other two members of the inquiry commission.
The committee has been given a time frame of six months to complete the probe, the chief minister said.
The agreement for the Vizhinjam International Transhipment Deepwater Multipurpose Seaport was signed with Gujarat-based Adani Ports and SEZ Private Ltd during the previous Congress-led UDF state government headed by Oommen Chandy.
Reacting to the setting up of the probe panel, Chandy welcomed it and said the impartial inquiry will put an end to controversies.
"My only request to the chief minister is that a comparative study of the cost, benefit and investment of the state, deriving from the present agreement and the agreement mooted by the previous V S Achutanandan-led LDF government may also be included in the terms of reference of the inquiry," he said in a Facebook post.
The project was first mooted in 1991 during the then UDF regime headed by Karunakaran and got a push two decades later under the Chandy government. The agreement was signed with the Adani group under Public Private Partnership (PPP) route on Design, Build, Finance, Operate and Transfer basis (DBFOT).
The CAG report, which had been tabled in the state Assembly recently, said the concession period for the project could have been 30 years instead of 40 years.
The 40 year period was adopted from 'Model Concession Agreement for State Ports' prepared by the Planning Commission. This agreement was adopted in 2014 for the Vizhinjam port through the cabinet decision, Chandy said.
"All the bid documents, including Model Concession Agreement and its conditions were vetted by the Department of Economic Affairs, Ministry of Finance before concurring in principal approval," he said.
CAG report on Public Sector Undertakings for the year ended March 2016 had pointed out lapses on the part of the state government while signing the agreement for implementing the project.
The technical and financial estimates prepared by external consultants were not scrutinised with due diligence resulting in inflation of cost estimates, the report had said.
"The interests of the state government were not protected adequately while drawing up the Concession Agreement," the report had said.