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Kerala Kaumudi Online
Wednesday, 12 February 2025 12.59 PM IST

Vizhinjam should get the same consideration given to Tuticorin, CM writes to PM

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THIRUVANANTHAPURAM: Chief Minister Pinarayi Vijayan has written to the Prime Minister against the Union Finance Ministry's decision to repay the Viability Gap Fund that the Central Government intends to allocate to the Vizhinjam International Port in installments. The chief minister pointed in the letter that the stand taken by the Union Finance Ministry only in the case of the Vizhinjam International Port is a deviation from the general policy maintained by the Central Government in the case of the VGF grant. The chief minister also requested the Prime Minister to intervene in the allocation of the VGF as grant.

The empowered committee formed by the union department of economic affairs had recommended providing Rs 817.80 crore as VGF to Vizhinjam. In order to get this amount, the Center had put forward a condition that the Kerala Government should repay the VGF based on the net present value. Although the Center is providing Rs 817.80 crore as VGF, it is estimated that if the changes in interest rates and income from the port are considered during the repayment period, it will have to repay around Rs 10,000 to 12,000 crore.

The chief minister pointed in his letter that the VGF is a one-time grant as per the criteria envisaged. It should not be considered as a loan. However, the chief minister explained in his letter to the Prime Minister that the central government is interpreting the amount given to the Vizhinjam Port Project as a loan given to the state government and making its repayment, including interest, the liability of the state government. There is no condition anywhere in the VGF guidelines issued by the Union Ministry of Economic Affairs to repay the grant that helps the concessionaire. Since the implementation of the VGF in Public Private Partnership (PPP) projects for infrastructure development in 2005, the Union Finance Ministry has sanctioned an amount of Rs 23,665 crore as VGF for 238 projects. However, in none of these, repayments have been made as if they were loans.

The VGF scheme was implemented with the intention of reducing the additional burden on the states investing in infrastructure development. The chief minister also pointed that the union finance ministry's new stance on VGF repayment in the case of Vizhinjam negates the logic of viability gap funding.

In addition to the VGF amount of Rs 817.80 crore provided by the Central Government, the state government has also sanctioned a similar amount as VGF to the concessionaire. In addition, the Kerala Government is investing an additional Rs 4,777.80 crore in this project. The chief minister also mentioned in the letter that since the state government is investing such a huge amount in a project of national importance, despite financial difficulties, these efforts should be given due consideration. The chief minister pointed that he had requested the union finance ministry to cancel the new stance taken on the VGF repayment issue, but it was rejected.

The chief minister also mentioned in the letter that similar conditions were not included when VGF was sanctioned for the Outer Harbour project of the Tuticorin Port. The chief minister also mentioned in the letter that Vizhinjam also deserves the same consideration as given to the Tuticorin Port. The chief minister requested the Prime Minister's intervention for a favorable decision on the issue related to the VGF repayment of the Vizhinjam project.

TAGS: VIZHINJAM, SHOULD GET, SAME CONSIDERATION, GIVEN TO TUTICORIN, CM, WRITE, MODI
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