Kerala Government and Adani Vizhinjam Port Finalise Supplementary Concession Agreement for Timely Completion

The Kerala government and Adani Vizhinjam Port Private Limited have reached a new agreement for the Vizhinjam International Port Project. The state cabinet, led by Chief Minister Pinarayi Vijayan, approved this supplementary concession agreement. This decision follows the withdrawal of arbitration proceedings, as stated in a release from the Chief Minister's Office.

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Project Completion Timeline

The revised agreement sets a new completion date for the second and final phase of the port. Initially planned for 2045, it is now expected to be finished by 2028. This updated timeline ensures that all phases of the port will be completed, unlike previous arrangements.

Investment and Capacity

Adani Ports is set to invest Rs 10,000 crore over the next four years. Upon completion, the port's minimum capacity will reach 3 million TEUs (Twenty-foot Equivalent Units). This significant investment aims to enhance the port's operational capabilities.

Delays and Penalties

The project timeline has been extended by five years due to delays caused by the COVID-19 pandemic and natural disasters like the Ockhi cyclone and floods. As a result of these delays, a penalty of Rs 219 crore has been imposed. Of this amount, Rs 43.8 crore will be paid to the state, while the rest will be withheld until 2028.

If the project is not fully completed by 2028, the five-year extension will be revoked. In such a case, the withheld amount will be collected by the government. This clause ensures accountability and adherence to the revised timeline.

The cabinet's approval came after consultations with the legal department and Advocate General. This agreement marks a significant step forward in ensuring timely completion of the Vizhinjam Port Project.