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The Shipping Ministry will go ahead with a performance audit at the International Container Transhipment Terminal at Vallarpdadam (ICTT) here.
The Ministry has entrusted the audit wing of the Comptroller and Auditor General (CAG), Chennai, with the job and is awaiting concurrence from the terminal operator, DP World. The operator’s consensus is mandatory in such cases.
The move assumes significance at a time when the underperformance of the Vallarpadam terminal, which was commissioned in 2011, has become a concern for the stakeholders, including the Ministry, Kochi Port and shippers.
Confirming the development, a Kochi Port source told BusinessLine that DP World had not responded so far. Since the Vallarpadam project is in the public private partnership mode, the authorities need permission from the terminal operator to carry out the job.
Besides, there is an ongoing dispute on the role of the CAG in carrying out performance audit in PPP projects, the source said citing a precedent in New Delhi.
Of the total ₹2,600-crore investment for the ICTT project, the government has invested ₹1,400 crore and the terminal operator ₹1,200 crore.
The directive to carry out the performance audit was given by the PMO based on a submission in the Rajya Sabha by the former member P Rajeeve.
It is not clear whether the underperformance of the terminal will come under the purview of the performance audit.
However, the revision of the Cabotage Law, which will expire on December this year after a three-year time frame, will be on the agenda of the performance audit. It appears that the continuation of the cabotage relaxation will be based on the outcome of the performance audit, the sources said.
The Ministry has been frequently asking the port for the reasons for the underperformance of the terminal, which has registered a 6 per cent growth in cargo volumes in March 31, touching 3.61 lakh TEUs out of the one million TEU capacity.
DP World, according to the sources, had cited several reasons for the under-performance, which included the inordinate delay in getting relaxation in Cabotage Law, non-completion of the national highway connectivity and failure to achieve 14.5 metre draft to berth mother vessels.
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