The Kerala Government will start the re-tender process for the Vizhinjam port and container terminal project only after it is cleared by the Union Environment Ministry. The approval is expected to come through by November this year.


In the interim period, the State intends to work on the master plan for the project and to prepare the ground for the Rs 3,000-crore EPC (engineering, procurement and construction) tender , an official spokesman said.

Efforts would also be launched afresh to get an exemption from the cabotage law. Combined with a prospective environmental clearance, this is expected to help elicit much better bids than what the Vizhinjam project received previously.

Meanwhile, the scope for viability gap funding is sought to be incorporated in the tender document. The State Government would also approach the Centre in this regard.

The scheme provides financial support in the form of grants (one-time or deferred) to infrastructure projects undertaken through public-private partnerships with a view to making them commercially viable.

It provides total viability gap funding up to 20 per cent of the total project cost, the spokesman said. The Government or statutory entity that owns the project may provide additional grants out of its budget up to further 20 per cent of the total project cost.

The scheme aims to ensure widespread access to infrastructure provided through the PPP framework by subsidising the capital costs. By meeting the gap to make economically essential projects commercially viable, the need for Government funding will be reduced. It will also allow for greater private sector participation.

(This article was published on August 2, 2012)
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