The Union government is soon likely to approve the Vizhinjam container terminal project in Kerala paving the way for signing of the concession agreement. The Rs 8,000-crore project was recently awarded to Lanco Infratech Ltd in consortium with Malaysia's Pembinan Redzai.
Speaking to Projectmonitor, Dr. Santosh Sathyapal, a spokesperson of nodal agency Vizhinjam International Seaports Ltd, said that the Central clearance is expected soon. Once this is in place, the formal letter of intent will be issued to the winning consortium, followed by formation of the special purpose vehicle and execution of the concession agreement, he said.
For Kerala, the awarding of the Vizhinjam container terminal is a major achievement given that the mega project was fraught with delays for over four years (See box). For the Lanco Group, the project is significant as it marks the multifarious group's entry into the maritime sector.
To be developed in four phases with an ultimate capacity of 6.5 million TEUs, the first phase of the project will aim at 1.5 million TEUs involving investment of Rs 2,400 crore over the next five years. While Lanco will construct the terminal, the Malaysian partner will operate it. The consortium will develop the project on BOT basis under a 33-year concession period. The Kerala government will have a 24 per cent stake in the special purpose vehicle that will be formed to develop the project.
Maritime experts opine that 50 per cent of the 20,000 ships that annually pass through the Suez Canal could anchor at Vizhinjam. The transshipment terminal could be in direct competition to international transshipment hubs like Dubai, Singapore and Colombo. The Vizhinjam port has inherent advantages in that its natural draft of 20m (within one nautical mile from the coast.) Besides, the port is located very close to international waters.
The other consortia in the final race were DS Constructions in association with Apollo Enterprises and KGL Ports International, Dubai; Nagarjuna Construction Company, Maytas Infra and OPM (Singapore); Videocon Industries, Gammon India, Gammon Infrastructure Projects and Sical Logistics; and Zoom Developers (Mumbai), Portia Management Services and Peter Fraenkael and Partners, both of UK.