Kerala's financial woes likely to affect Vizhinjam development

THIRUVANANTHAPURAM: Concerns have found their way as many officials fear the prospect of Kerala’s financial woes stopping the development works of Vizhinjam port in the coming days. More than 2600 crore is urgently needed to provide Viability Gap Fund allocation, including infrastructure development. The cabinet meeting decided to go for a loan but ill luck doomed the chances as the money was not granted.

Adani Group has demanded immediate disbursement of viability gap funds. Adani group should settle almost Rs 2000 crore immediately for bringing the cranes to Vizhinjam port. So, the company has warned the government about the work getting prolonged if the financial assistance gets delayed.

Vizhinjam Company requested to allocate 338.61 crores for infrastructure development but only 16.25 crores was given. The crisis is looming at a time when the port looks to receive its first ship by May of next year.

The withdrawal of HUDCO and NABARD citing technical issues in the guarantee, prevented the government from taking the loan. The government is also worried that if this loan is taken, the centre will include it in the public debt. This will later hamper the government's prospect of taking loans for other necessities.

Rs 4089 crores is the cost of port construction. Out of this, the Adani Group will spend 2454 crores. The remaining Rs 1,635 crore is to be provided by the central and state governments as viability gap funds. Rs 1463 crores for embankment construction and Rs 363 crores for infrastructure development are to be paid by the state.

Rs 817.80 crore in the Viability Gap Fund is the central share. The central government is all set to allot the amount and is waiting for the state government's assent.