THIRUVANANTHAPURAM: With just a month away from the commissioning of the Vizhinjam International Seaport, the state and the central governments differ over the payment of Viability Gap Funding (VGF).
The state government has objected to the Centre’s decision to impose conditions on paying the latter’s share of Rs 817.8 crore. Both parties, as project proponents, have to pay Rs 1635 crore to Adani Vizhinjam Port Pvt Ltd (AVPPL), which is the concessionaire of the project.
But the new condition is that the VGF disbursed by the Government of India to the Concessionaire should be repaid by the Kerala government in terms of the Net Present Value (NPV) by way of premium (revenue) sharing. This would involve a further loss of Rs.10,000 to 12,000 crore to the State Exchequer in actual terms, computed on projected interest rates and revenue realization from the port over the period of repayment.
CM Pinarayi writes to Nirmala Sitaraman, seek Union govt's share in the VGF
Chief Minister Pinarayi Vijayan wrote a letter to the Union Finance Minister Nirmala Sitharaman demanding her intervention for the release of the share of Union government in the VGF without imposing the condition that the state must repay it later. He pointed out that the Centre has not imposed any such conditions on similar projects such as the Outer Harbour project of VOC Tuticorin Port in Tamil Nadu. The Chief Minister reminded that the Centre stands to benefit financially from the Vizhinjam Port by way of customs duty.
The Vizhinjam Port was the first Port project in the country to have received in-principle approval for Viability Gap Funding (VGF) on 3rd February, 2015 under the Scheme for Financial Support to Public Private Partnerships in Infrastructure.
The tripartite agreement was signed by the state, the centre and Adani Vizhinjam Port Pvt Ltd (AVPPL), which is the concessionaire of the project. The State is investing resources to the tune of Rs.5595 crores out of the total project outlay of Rs.8867 crores.
