News Detail

• The ambitious Rs 4,010-crore Vinzhinjam Seaport Project in southern Kerala is set to be delayed further with the government deciding to renegotiate the financial bid put up by the sole bidder Welspun Infratech-led consortium.The consortium has sought an up-front grant of Rs 480 crore from the state."The Cabinet has decided to renegotiate the financial bid with Welspun Infratech. Towards this we have decided to set up a committee comprising Chief Secretary, and Secretaries from the Ports, Expenditure and Law departments," Kerala Ports Minister K Babu s.

• When contacted, Parvez Umrigar, Managing Director of Mumabi-based Welspun Infratech, said he has not heard anything in this regard from the government since submitting the bid and therefore it is difficult to comment.The development comes even after IFC, the lead adviser for designing and implementing the transaction, reportedly endorsed the Welspun's demand for the Rs 480-crore grant.The move is set to further delay the project, which has been in the works since 2003, even though the Minister insisted that this will not delay the project.

• Asked specifically whether he is open to renegotiate the bid, Umrigar said, "I don't have any communication from the Government. I don't know what the government wants from renegotiating."As to what will be the mandate of the proposed panel of secretaries and how soon it will submit the report, the Minister said, "We want them to give the report at the earliest, say by June-July."As far the mandate is concerned, we want to the price bid to be renegotiated," Babu said, indicating the government is not comfortable with the bid, which it had opened on February 7, and seeks an upfront grant of Rs 379.54 crore to be spread over an initial period of 16 years.

• The government was planning to invite the EPC (engineering procurement & construction) tenders this month but that can happen only after the panel gives its report.Babu said the Government now plans to invite the EPC tenders by June-July. The environment impact assessment (EIA) report, being prepared by an L&T-Ramboll consortium and Asian Consulting Engineers, is expected by September.

• The State Budget for FY13 has earmarked Rs 250 crore for the port project.The Welspun-led consortium includes Welspun Infratech, Welspun Corp and Australia's Leighton Engineering Holdings.If the Welspun bid is accepted, it will invest Rs 970 crore on the port superstructure, but will receive Rs 479.54 crore as grant from the state towards operating expenses over 16 years. It will be port operator for the first 30 years, after which it has to be handed over to the state.

• The Mumbai-based firm became the only contender after Adani Ports was denied clearance from the Union Home Ministry for the project coming up in Thiruvananthapuram district.As many as 14 firms/consortia, including the state-run Shipping Corporation, had initially shown interest in the project. But only a consortium led by Welspun and another led by Adani Ports put up the technical bids.

• Under the bid contract, out of the Rs 4,010-crore port in the first phase, the state will invest Rs 3,040 crore for building basic infrastructure while the selected private firm will put in Rs 970 crore to erect cargo-handling equipment.The three-phased Vizhinjam International Seaport is estimated to cost Rs 7,800 crore and is being developed on a landlord model wherein the state will build the port infrastructure, while the superstructure will be erected by the private operator.

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