Vizhinjam deal: Adani Group set to earn Rs 29,217 crore extra, says CAG

'The interests of state government were not protected adequately while drawing up the agreement' The agreement with the Adani Group was signed during the tenure of the UDF government By extending the contract period to 40 years, the Adani Group would gain an extra Rs 29,217 crore The total cost of the Vizhinjam port project was estimated at around Rs 7,525 crore

The Comptroller and Auditor General of India (CAG) has hit out against the Vizhinjam International Seaport project agreement, a dream project of Kerala, stating the deal is against the interests of the state.

In the report submitted in the state Assembly, the CAG pointed out that by extending the contract period of the project from 30 to 40 years, the Adani Group would gain an extra income to the tune of Rs 29,217 crore. The usual practice is to give a contract period of 30 years to projects taken under public-private-partnership (PPP), and renew at a later stage if needed, it noted.

The agreement with the Adani Group, signed during the tenure of the previous UDF government, also includes a clause for an additional extension of 20 years. If this is to be followed, the contractors will make an additional profit of Rs 61,095 crore. Also, the clause for a 20-year extension is against the law.

"The interests of state government were not protected adequately while drawing up the Concession Agreement", the CAG report said in its conclusion. 

The report comes a day after CPM veteran and former Chief Minister VS Achuthanandan demanded a white paper from the ruling LDF government on the Vizhinjam port agreement. The leader also alleged corruption in the deal of the project. 

The total cost of the Vizhinjam port project was estimated at around Rs 7,525 crore. As per the agreement, Adani Group is responsible for funding and development of dredging and reclamation of 53 acres of land from the sea, construction of berths and related infrastructure and operation of the port.

(with PTI inputs)