THIRUVANANTHAPURAM: Even though the Centre has put forward conditions for sanctioning viability gap fund (VGF) of Rs 817.8 crore for Vizhinjam port, the Adani group has decided to commission the port without paying any heed to it.

If the Centre releases Rs 817.8 crore, the state will also have to pay an equal amount to the Adani Group as per the provision. There is no guarantee that the state’s share will be released soon as it is in financial crisis. The Adani Group is of the view that it will not waste time on the Rs 1635.6 crore of the two shares.

27 ships were delivered in the trial run in October alone. The centre’s nod for commissioning in December is awaited.

The decision to provide VGF was taken for the first time in the country for Vizhinjam port. An order issued by the Union Finance Ministry in 2014 after detailed deliberations had specified its provisions. It does not say whether the funds given by the Centre are loans or should be repaid. The state government will get one per cent of the total revenue of the port in the first year after the completion of ten years of commissioning. It will increase by one per cent each subsequent year. This can reach up to a maximum of 25 percent.

According to the order, the Centre should get 20 per cent of the amount received by the state government every year like this. This income will be received for up to 40 years. The Centre tightened the revenue-sharing provision at a time when the port company and the central and state governments were about to sign an agreement to make VGF available. However, Kerala is opposing this provision stating that this provision is not applicable to Thoothukudi.

• Adani is investing Rs 9,700 crore for the next phase. It doesn’t have VGF. The construction of the second and third phases will be completed by December 2028.
• Of the Rs 8,867 crore for the port, Rs 5,595 crore is borne by the state and Rs 818 crore by the Centre. When completed in 2028, the state and Adani’s joint investment will be Rs 20,000 crore.

Should be given as one-time grant: CM

Chief Minister Pinarayi Vijayan has written a letter to Union Finance Minister Nirmala Sitharaman requesting to reduce the financial burden of Kerala by considering VGF as a one-time grant and not as a loan. The state exchequer is incurring a loss of Rs 10,000 to Rs 12,000 due to repayment of Rs 817.80 crore. The letter also said that Vizhinjam should receive the same treatment given to the Thoothukudi port by the central government.