Vizhinjam should not be made to go through more trouble

The central government has come up with a new intervention as the Vizhinjam transhipment port, which is set to become the largest port in the country, has overcome several hurdles and is set to be commissioned next month. Before the signing of the port construction contract, the central and state governments had signed an agreement with the Adani Company, which is in charge of port construction and management. As per the agreement, there was a provision to provide viability gap funds for the project. Accordingly, the Centre and Kerala will have to pay Rs 817 crore each as VGF. The VGF provision was included in the agreement with special consideration as it was the first port under the public-private partnership system. Though it is time to commission the port, the Centre has not yet released the share to be paid accordingly.

Even if the amount is paid, the Centre wants the amount to be treated as a loan given to the state government and repaid in instalments. If that amount has to be repaid along with interest in 40 years, Rs 10,000 crore to Rs 12,000 crore will flow out of the state exchequer. On the contrary, if Rs 817 crore given as VGF is converted into a grant, the state will be relieved of this burden. There is no justification for penalising the state by adding at the end a clause that was not included at the time of signing the agreement. Moreover, in the case of Thoothukudi port, the Centre is sanctioning funds in the VGF category as a grant. Such a discriminatory approach is constantly taking place in any need of Kerala.

The Vizhinjam port does not belong to Kerala alone. It is not appropriate for the Centre, which has been adopting a liberal approach to increase investment and employment opportunities in the country, to be adamant in the case of Vizhinjam. Lakhs of crores of rupees are being spent on industrial and infrastructure development projects. Nothing special is going to happen to the Centre by giving Rs 817 crore as a grant to Vizhinjam Port, which is the most modern port in the country and is going to surpass the world's leading ports. Chief Minister Pinarayi Vijayan has written a letter to Union Finance Minister Nirmala Sitharaman, citing discrimination and requesting that the viability gap fund should be considered as a grant. Kerala expects a positive response to the letter.

The Centre must backtrack from the present decision if the new proposal that Kerala should repay the viability gap fund is not to be a new headache for the state. Of the Rs 8,857 crore being spent for the Vizhinjam project, Rs 5,595 crore is borne by the state government. As such, the suggestion that Kerala should repay the viability gap funds is not in line with common justice. While the liberal approach towards Adani continues with projects elsewhere, it is natural to be doubtful that the Centre is coming up with new conditions just because Vizhinjam is in Kerala. The Centre should show the propriety not to create any new bottlenecks at the last minute for the Vizhinjam port, which is about to start operations.