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i-maritime News Service

Move for more talks with Welspun consortium on Vizhinjam port - 2012-07-02



The Vizhinjam International Seaport Ltd (VISL) has decided to hold another round of discussion with the consortium led by Welspun Infratech Ltd (India). The VISL board of directors on Thursday decided to invite the consortium for talks to see whether it would scale down its demand for a grant of Rs 479.54 crore to operate the proposed port. The consortium, in its financial bid for taking up the role of the port operator, had quoted the provision of this grant from the State government for operating the port for 30 years. The grant is to be given over a period of 16 years. Since only one bidder is in the fray, price discovery has become difficult. This is, apparently, making the job difficult for the decision makers. The VISL, the government entity promoting the project, had earlier held discussions with the consortium but the meeting did not go the way the VISL and the government expected.

The board meeting on Thursday favoured the idea of making another try before exploring the option of floating another global tender.

The investment estimated for the first stage of the port project, to be developed under the landlord model, will come to Rs 4,010 crore. The port operator is responsible for building the superstructure of the port, which would entail and investment of Rs 970 crore. After 30 years, the port will become government property, free of lease encumbrances.

One thinking in the government and the VISL is that there is no hurry in fixing the port operator since the role of the port operator will come only when the work on basic infrastructure, which is the VISL’s responsibility, has progressed to a certain stage. The project is yet to win environmental clearance. Once environmental clearance is won, more bidders may show interest in the project, it is felt. The financial advisors to the project, however, have pointed out to the government the advantages of fixing the port operator early.

Source : Hindu Business Line