The Hindu Business Line : Finance Ministry mum on revised Vallarpadam pact

AFTER sitting on the file for almost a month, the Finance Ministry has returned "without making any comments" the Shipping Ministry's proposal for effecting changes to the draft licence agreement as recommended by the Cochin Port Trust for the proposed international container transhipment terminal (ICTT) at Vallarpadam.

While refraining from making any comments on the changes, the Finance Ministry has, however, directed the Shipping Ministry to move a note to the Cabinet Committee on Economic Affairs (CCEA) in this regard. "We will convey our stand when the Cabinet takes up the proposal," North Block officials said while returning the file.

The Shipping Ministry is "unhappy and upset" with the stand taken by the Finance Ministry after anxiously awaiting a favourable response on the changes to the draft licence agreement. North Block's delay in making the comments has forced the Cochin Port Trust to extend the deadline for signing the licence agreement for the project from December 20, 2004, to January 20. This leaves the Shipping Ministry hardly a fortnight to prepare the note and complete the formalities for securing the nod from the CCEA.

"A positive response from the Finance Ministry would have facilitated a smooth sailing for the proposal when the CCEA took up the proposal," a Shipping Ministry official pointed out.

Dubai Ports International (DPI) was awarded the contract for developing and operating the Rs 2,118-crore project after emerging the highest bidder by quoting a revenue share of 33.30 per cent. At the request of the Cochin Port Trust, DPI has also extended the validity date for the bank guarantee beyond December 30, 2004.

DPI has sought a rescheduling of the revenue share and upfront fee after the CCEA directed in August last year to start work on the ICTT at the earliest without waiting for traffic to reach the level of four lakh TEUs at the existing Rajiv Gandhi Container Terminal (RGCT).

"We are merely seeking a deferment of the revenue share and the upfront fee and not a reduction to comply with the directive of the CCEA for early migration from the RGCT to the ICTT. So, this should not pose a problem to the Government," a DPI official said.

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