Vizhinjam Port Agreement Signed

“The interests of the state government were not adequately protected in the development of the concession agreement,” the report states in its conclusion. The concession period for the PPP project would be 30 years and the granting of an additional 10-year concession period in the Vizhinjam agreement would allow Concessionaire (Adani Group) to generate an additional $29.217 billion in revenue based on revenue estimates in Ernst and Young`s feasibility report. According to the report, aspects of the concession agreement, such as the extension of the concession period and the development of commercial real estate, have brought considerable benefits to Adani at the expense of the State. The Adani Group`s excess benefit in extending the concession period alone was estimated at 29,000 balances, even though there was no reasonable benefit to the State. Despite the Kerala government`s funding of 67 per cent of the project, the CAG found that “the government`s interests were not adequately protected during the development of the concession contract.” It concluded that “the technical and financial estimates made by the external consultants were not verified with due diligence, resulting in inflation in cost estimates” and that the agreement for Adani included significant grants, all of which were granted at the expense of the public treasury. “The interests of the state government were not adequately protected in the development of the concession agreement,” the CAG report states in its conclusion. In the report presented at the National Assembly, the CAG indicated that extending the duration of the project contract from 30 to 40 years would allow the Adani Group to obtain an additional income of 29,217 kronor. As a general rule, it is customary to grant a contractual term of 30 years to projects implemented under a public-private partnership (PPP) and, if necessary, to extend them at a later date, he said. The Kerala government will decide on the award of the port operator contract for the port of Vizhinjam to the consortium led by Welspun, officially stated.

In August 2015, the Kerala government and the Adani Group signed an agreement for the Deepwater Seaport Vizhinjam International project near the state capital. The agreement was quick to be controversial after the publication in May 2017 of an extremely critical report on the project`s finances and how it was awarded. Two months later, the state government formed a three-member commission to “responsible for decisions against the interests of the state… as reported by the CAG.¬†For nearly a year, the Commission heard complaints, counter-claims and sworn assurances from environmentalists, government officials and Adanis representatives regarding the CAG`s results. However, in an unusual move just before the last hearing, the Commission`s mandate was inexplicably changed. The Commission was tasked with verifying whether the CAG report had any value in itself. According to a Reuters report, China also wanted to work with an indian company not named to build the port, but its opening was rejected by New Delhi on national security grounds. [5] It is speculated that the port will have berths for the Indian navy and coast guard.

[5] The port project, which was to be built near Kovalam beach, was first proposed… Thiruvananthapuram: Comptroller and Auditor General of India observed that Kerala`s interests were not protected in the agreement with Adani Ports and SEZ Private Ltd for the implementation of the Rs7525 crore Vizhinjam International Deepwater Multipurpose Seaport project. In its report on public sector enterprises for the end of March 2016, presented to the Assembly on Tuesday, CAG stated that technical and financial estimates prepared by external consultants had not been verified with due diligence, resulting in inflation in cost estimates. The Comptroller and Auditor General of India (CAG) opposed the Vizhinjam International Seaport project agreement, a Kerala dream project, and said the agreement is contrary to the interests of the state.

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