The Hindu Business Line : Vizhinjam terminal: Kerala to review project structure

This has been necessitated after a slew of suggestions made by prospective investors who refrained from submitting the techno-economic bids by December 20, the last date fixed for the purpose.

Even though seven companies, including three foreign entities, had taken the request for proposal (RFP) after a pre-bid meeting in July, no one submitted the bids by the last date.

The Department of Ports had originally fixed August 31 as the last date, which was subsequently postponed to October 15 and again to December 20. The Department officials had explained that this was due to the several clarifications sought by the bidders from time to time on various financial parameters.

The foreign bidders in the fray were Portcon, a subsidiary of National Ports Authority of South Africa, Hili Company of Malta in collaboration with Infrastructure Leasing and Financial Services (IL&FS) and Beckett Rankine Partnership, London. The Indian companies who had obtained the RFP were L&T, Chennai; Afcons, Mumbai; Adani Export, Gujarat; and Gammon India, Mumbai.

Dr K. Jayakumar, Chief Executive Officer, Vizhinjam International Seaports Ltd, the special purpose vehicle formed by the Government last week to facilitate the project implementation, told Business Line that the companies were still very much interested in the project, but wanted further relaxations in the various clauses. They had cited the greenfield nature of the project, the long gestation period, the huge cost factor and the complex profile of the transhipment business to support their demand.

He, however, said Portcon had withdrawn from the scene following the change in the internal policy of its holding company, Transnet, regarding international investments.

Dr Jayakumar informed that some of the relaxations sought by the companies pertained to risk-sharing and capacity-building parameters. While the Government would try to incorporate the suggestions to the extent possible while reviewing the financial structure of the project, it would not compromise on its interests.

He pointed out that the Government was totally committed to the implementation of the project. The formation of the special purpose vehicle with the Chief Minister as the Chairman and the Minister of Ports as the Vice-chairman was proof enough of the Government's resolve to go ahead with the project, he added.

It will work out the new structure shortly so as to begin procuring of bids within a month. It will first approach the existing bidders and if it does not work, it may even think of floating a fresh tender, he said.