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Panel clears Adani’s lone bid for Kerala’s Vizhinjam port

The port, when built, is expected to handle up to 18,000 twenty-foot equivalent (TEU) container ships with a rated annual capacity of 10 lakh TEUs.

By: ENS Economic Bureau | New Delhi |
May 9, 2015 2:30:31 am

An empowered committee set up by the Kerala government on Thursday is learnt to have gone ahead and recommend the lone bid submitted by the Adani Ports and Special Economic Zone Ltd. (APSEZ) to build and operate a new port at Vizhinjam in Kerala to the state Cabinet. The Rs 4,000-crore project aims to convert a minor port near the state capital Thiruvanathapuram into a major transhipment hub.

APSEZ — India’s biggest private port operating firm — had submitted the bid on April 24  and sought Rs 1,635 crore as grant for the proposed Vizhinjam International Multi-Purpose Seaport project, to be executed in partnership with the state. The board of the special purpose vehicle set up for executing the project — Vizhinjam International Seaport Ltd — will meet in Thiruvananthapuram on May 13 to ratify the decision of the empowered committee. Subsequently, the bid is expected to be referred to the state Cabinet for final approval.

In February, an ‘in-principle’ approval was accorded by the Union finance ministry for the viability-gap funding based on the proposal of the Kerala government to develop the all-weather, multi-purpose, deep-water, mechanised greenfield port on a Design, Build, Finance, Operate and Transfer (DBFOT) basis. The port, when built, is expected to handle upto 18,000 twenty-foot equivalent (TEU) container ships with a rated annual capacity of 10 lakh TEUs and entailing a total project cost of Rs 3,930 crore.


The lone bid submitted by APSEZ to build the Vizhinjam port had led to a rekindling of the debate on opening up the country’s coastal shipping business to foreign vessels. The Kerala government is learnt to have petitioned the shipping ministry to ease the cabotage regulation to enable the port project achieve its full potential. Under the cabotage regulation, only Indian registered vessels are allowed to operate along the country’s coast for carrying cargo and foreign ships can be hired only when Indian ships are not available, subject to a permit granted by the maritime regulator. The Centre has earlier relaxed the cabotage law only for the container trans-shipment terminal operated by DP World Ltd at Vallarpadam in Kochi port for a three-year period beginning September 2012.

Though five major port operating companies had qualified for submitting tenders after a global tender was floated by Vizhinjam International Seaport Ltd., only APSEZ, Essar Ports and a Srei Infrastructure consortium had submitted Expression of Interest (EoI) for submitting tenders in March this year. But Apart from APSEZ, the others failed to submit the final bid.

At present, while some 72 per cent of containers are transported from an Indian port to their destination port abroad, an estimated 28 per cent of the containers are trans-shipped through either Colombo, Singapore or other international ports every year, according to the shipping ministry.

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