Vizhinjam: 1850 crores will be borrowed for Adani

• Agreement in principle for HUDCO loan

THIRUVANANTHAPURAM: State company Vizhinjam International Seaport Limited (VISL) borrows Rs 1850 crore to pay Adani Group for Vizhinjam port as the state is reeling under financial crisis. The loan is taken from HUDCO, a central public sector organization, with the approval of the Finance Department. Port department officials held talks with HUDCO officials. It was agreed in principle to grant loans with a government guarantee. There will be further discussions to determine interest etc.

Although the Vizhinjam project will be commissioned in 2024-25, the government will get dividends only after 15 years. Dividends are a percentage of gross income. The attraction of the HUDCO loan is that only then the repayment starts. Other loan options will also be explored before signing the MoU.

According to the agreement, Rs 1450 crore will be paid to Adani International Seaport Limited after the completion of the breakwater with a total length of 3100 meters. It is enough to give it in phases, but even after the breakwater crossing a length of 2000 meters, neither the center nor the state has given a single rupee. Adani wants 300 crores out of this and 400 crores out of the viability gap fund of 816 crores immediately. Adani has invested Rs 3600 crore instead of Rs 2900 crore.

Adani's pressure

1. Minister Ahammad Devarkovil had assured Adani Seaport CEO Rajesh Jha in December that the central share of Rs 817 crore and the state share would be paid immediately.

2. Later Adani Group also pressed for cash. Then a Chief Secretary-level committee was appointed and the report was forwarded to the Finance Department. The loan is a continuation of this.

Budget announcement

Minister KN Balagopal's budget had promised to bring in private entrepreneurs to implement projects worth Rs 60,000 crore for ancillary development of the port and allocate Rs 1,000 crore to acquire land for the industrial corridor costing Rs 5,000 crore. Loans came next.

'Last year it was decided to find the funds to give to the Adani group. The loan is a part of that.'

-Ahammad Devarkovil

Minister of Ports Department