Kerala signs Rs 817 cr VGF agreement for Vizhinjam port development; minister criticizes Centre

Thiruvananthapuram: After much controversy, the Rs 817 crore VGF (Viability Gap Funding) agreement for the development of Vizhinjam Port, which the central government is providing as a loan to Kerala, has finally been signed. Kerala's Chief Secretary, Sarada Muraleedharan, signed two key agreements on behalf of the state. 

The first agreement is a tripartite deal between the central government, Adani Vizhinjam Port Private Limited (the company receiving the funds), and a consortium of banks. The second agreement stipulates that 20 percent of the port's revenue profits will be shared with the central government.

Minister criticizes Centre

Despite the agreement's signing, Kerala criticized the Centre's decision to provide the VGF amount as a loan, rather than as a grant, which is typically the norm for such projects. Minister VN Vasavan remarked that while Kerala had requested the VGF as a grant, the agreement had to be signed due to time constraints. He referred to the signing of the agreement as a "historic moment."

Minister Vasavan further stated that the state is taking swift action to improve road and rail connectivity to the port. He emphasized that the port’s full potential will only be realized once these infrastructure projects are completed, with an expected completion date of 2028. 

He also expressed hope that the central government would provide additional support. As for the port's significance, Minister Vasavan said that Vizhinjam Port has already garnered global attention.