Vizhinjam port: Kerala govt takes loan to pay Rs 100 cr to Adani group

The state's portion of Rs 100 crore was paid after receiving a loan from the Kerala Finance Corporation (KFC) due to the financial crisis it is now experiencing.

Thiruvananthapuram: The state government has entrusted over Rs 100 crore as its share for the construction of the breakwater, a part of the Vizhinjam Port Project. This is the first instalment of the construction. 

Until March 31, the State was required to pay 25 per cent of the breakwater's construction costs, or Rs 347 crore. The state's portion of Rs 100 crore was paid after receiving a loan from the Kerala Finance Corporation (KFC) due to the financial crisis it is now experiencing. Prior attempts by the Kerala government to get a loan from the Housing and Urban Development Corporation (HUDCO) were unsuccessful.

Kerala must contribute Rs 100 crore each for land acquisition and railway development. The state had tried to get a loan of Rs 550 crore from a consortium of cooperative banks to cover expenses like this.

Adani Ports and Special Economic Zone Ltd, (APSEZ), India’s largest port developer and part of the Adani Group, will develop India’s First International Deepwater Seaport Project at Vizhinjam. Given Vizhinjam’s access to prominent international waterways, the project will be a significant catalyst in positioning India strategically as a global transhipment hub.

For the Vizhinjam port, the government intends to borrow a total of 3400 crores from HUDCO. A total of Rs. 1170 crore of money will go towards the port-related railway project. While Kerala must pay the Adani Group Rs 400 crore, the Central Government must pay Rs 818 crore as viability gap money. The government has taken steps to expedite the release of viability gap money under the three-party agreement.