Logistics

Vizhinjam project: Welspun agrees to cut ‘grant’ by Rs 80 cr

Vinson Kurian Thiruvananthapuram | Updated on March 12, 2018 Published on July 09, 2012




The consortium led by Welspun Infratech, the lone bidder for the Vizhinjam Port project, has agreed to bring down the amount of ‘grant’ it had sought for operating the port by Rs 80 crore to Rs 399.55 crore.

The consortium had originally asked for Rs 479.54 crore.

HIGH-LEVEL TALKS

This was agreed on after a high-level Welspun Infratech team held several rounds of discussions here with the Kerala government.

The special purpose vehicle, Vizhinjam International Seaport Ltd (VISL) will now take forward the proposal to an empowered team led by the chief secretary. It will be then escalated to the State Cabinet for a final decision, Mr A.S. Suresh Babu, Managing Director and Chief Executive Officer, VISL, told Business Line.

A BOT concession agreement provided for payment/demand of a ‘premium’or‘grant’ as the case may be, depending on how the project evolved.

Accordingly, VISL had the right to ask for premium in the form of revenue share and/or upfront amount in the case of multiple competing bids.

The bidder in turn had the right to seek a grant upfront and/or revenue support if conditions allowed it.

LEGAL WRANGLES

It feared that accepting the single bid would by itself land in legal wrangles. And conceding a grant would further exacerbate the problem.

It was then that the Chief Minister, Mr Oommen Chandy, went on record saying the government might consider going for a retender.

But Welspun Infratech responded by offering to review the size of the grant and settled down for talks.

[email protected]

Published on July 09, 2012
null
This article is closed for comments.
Please Email the Editor