Company quotes 40% viability gap funding for the Rs 4,089 crore project; concession period fixed at 40 years, extendable up to 60 years
Gautam Adani-owned Adani Ports & Special Economic Zone Ltd (APSEZ) has turned out to be the sole bidder for Vizhinjam International Seaport Ltd (VISL), a Kerala government-owned company that is setting up a mega port, off the state capital of Thiruvananthapuram. The bids were opened on Friday after the extended deadline expired.
A senior VISL official told dna that APSEZ quoted 40% of the total project cost as viability gap funding (VGF), which is the maximum permissible amount. Since the total project cost is pegged at Rs 4,089 crore, 40% VGF amounts to Rs 1,635.60 crore. As per the VGF rules, the first 20% (Rs 817.8 crore) will come from the central government kitty while the remaining 20% (Rs 817.2 crore), from the state government.
If the bid is accepted, APSEZ will get to run the port without sharing any revenues for first 15 years. As per the bid conditions, the successful bidder will start sharing 1% of realisable value (port revenues) from 15th year, with the share increasing each year by 1%. The concession period is fixed at 40 years, extendable up to 60 years.
The successful bidder should also share 10% of the revenues from the development of port estates such as commercial and residential projects, beginning seventh year.
A S Suresh Babu, managing director & CEO, VISL, told dna that the empowered committee, headed by the state chief secretary, would evaluate the bid. "Subsequently, its recommendation will be reviewed by the VISL board, chaired by the chief minister,” he said.
This time around, the government was expecting better participation from the private sector since the central government has assured concessions under Cabotage law that otherwise bars all foreign ships from handling coastal cargo, which is reserved for Indian flag-bearing ships.
The government was expecting that at least three companies would submit tenders, sources told dna. It had been forced to extend the deadline after the bidding drew a complete blank in the earlier tender.
The extended deadline ended on Friday (April 24) after which the tenders were opened.
As per the original schedule, the price bids were to have been opened in September 2014. After a couple of extensions, the government had extended the deadline once again in February after the bidding process drew a blank.
Designed primarily to cater to container trans-shipments besides multi-purpose and break bulk cargo transport, the ambitious deepwater project follows the most successful landlord port model. As per the plan, the port is likely to have a quay length of 2 km in three phases.
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