CAG observation on Vizhinjam Port triggers political debate

The Comptroller and Auditor General report on the alleged lapses on the part of the previous government with regard to the Rs 7525 crore Vizhinjam International Seaport project, is "extremely serious", Kerala Chief Minister Pinarayi Vijayan said today. He said that the CAG might have considered only the current situation while preparing its report and it has not examined about the long-term benefits for the State.

Incidentally, Achuthanandan on Monday had demanded a white paper on the project, saying the agreement is "not in the interest of Kerala".

On the CAG finding that the state government erred in extending the concession period for the project from 30 years to 40 years, Chandy said the decision was based on the Model Concession Agreement for state ports issued by the Planning Commission.

The government had originally envisaged an extension period of ten years, and if it was retained, an additional revenue of Rs 61,095 crore (present value-Rs 353 crore) would have accrued to the state. By doing so, the state has foregone revenue to the tune of J2,153 crore, allowing undue benefit to the private partner, it said. "I fully welcome it and I request Vijayan to do it at the earliest and without delay", Chandy told reporters here.

In reply, state ports minister Kadanapally Ramachandran said the state government will look into the issues raised.

The concession agreement for the project with the Adani group was signed in August 2015 when the Congress led United Democratic Front government was in power. "CAG comparing the Vizhinjam port with Colachel port, which is just in the conceptual stage, is also not correct", he said.

Chandy also expressed hope that the CAG report would not come in the way of implementing the project, coming up at nearby Vizhinjam.

Finance Minister T.M. Thomas Isaac had on Tuesday stated that the LDF government "would not scrap the project" in view of the CAG's remarks. "And most importantly there has been no change effected in the agreement after we put up the pre-bid qualifying conditions", he added.

The proposed Vizhinjam Port is to be completed in three phases. But the government received the tender only from the Adani group. "The examination should be conducted soon", the former Chief Minister said.

  • Zachary Reyes