Multicrore Vizhinjam project evokes interest

THIRUVANANTHAPURAM: Around 30 national and international firms have shown keen interest in partnering Kerala for the multi-crore Vizhinjam Multi-purpose Seaport project.

The deadline for filing Expression of Interest (EoI) for the project ended on Thursday evening.

Big Indian names in the list include Gammon, GMR, Reliance and Skil Infrastructure, sources said. International firms which filed EoIs include those from Belgian and South Korean countries. Amsterdam and Busan ports have sought more time to study the Government’s proposal.

During the next three weeks, the Vizhinjam International Seaport Ltd (VISL) will hold consultations with the companies. The technical and financial models for the seaport will be finalised by August-end. VISL hopes to release the Request for Qualification (RfQ) in early September and the formal global Request for Proposals in November. “The response has been beyond all expectations,” VISL CEO and Ports Secretary Sanjeev Kaushik said when contacted. “The EoI is just a preliminary, though. Those who have not filed EoIs can do so when we release the RfQ.”

So overwhelming has been the response that VISL had to turn away Chinese and Hong Kong companies since getting security clearance for them is a near-impossibility.

Focus on container transshipment

At current estimates, the project will cost around Rs 5,000 crore. The private partner will enjoy a 30-year concession period. A new special purpose vehicle (SPV) will be formed with the private partner.

The Government will have 74 percent stake in it with 49 percent as equity of VISL and 25 percent as subordinated debt by VISL to the SPV.

In the first-phase slated to be completed by 2020, a 650-metre berth and a three-kilometre breakwater will be constructed.

The port’s peak capacity in this phase will be between 2.1 million TEUs and 2.4 million Twenty-foot Equivalent Units (TEUs). The phase is expected to cost Rs 3,000 crore. This is also the phase where the State Government will have to shell out the lion’s share: about Rs 2,000 crore for constructing the breakwater and for land reclamation. “The Government is actively trying to get long-term loans from the World Bank or ADB to finance its commitments in Phase-I,” Kaushik said.

Private partners

Phases II and III will be funded by the private partner. In Phase II, the berth will be extended to 1.5 kilometres.

The breakwater will be extended by one more kilometre. A cruise terminal will be an added facility. The big challenge before VISL and the State Government is converting the displayed interest into robust bids.

While the EoI has turned out to be a hit, it may be recalled that 43 companies had attended the special investors’ meet the Government organised in April 2007.

Most of them did not bid for the project.