THIRUVANANTHAPURAM: The state cabinet has decided to avail Rs 817.80 crore Viability Gap Fund from the Centre for the development of Vizhinjam port based on certain conditions. The cabinet also gave the nod to sign a tri-party agreement to develop the Vizhinjam International Harbour.
The cabinet also decided to expedite the second and third stages of development of Vizhinjam port.
As per the concession contract, Adani Vizhinjam Private Port Ltd (AVPPL) should have completed the project on 3-12-2019. Due to 16 major reasons including Ockhi and floods, the project could not be completed on time. This led AVPPL to seek an extension which was rejected by Vizhinjam International Seaport Ltd.
This was followed by arbitration steps by both sides. The state government realised that when the two parties proceed with arbitration, the project will be inordinately delayed and also VGF will be lost. Hence the cabinet decided to expedite the project by coming up with conditions.
The cabinet noted that AVPPL had filed an arbitration complaint citing Rs 3,854 crore compensation. VISL had filed a counter claim of Rs 911 crore. The cabinet urged both parties to withdraw from the arbitration process.