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Kerala Port Project Lopsided in Favour of Adani Group: CAG Report

A CAG report has found that the interest of Kerala were not protected adequately while drawing up the concession agreement in the Vizhinjam international Deep water Multipurpose sea project.

Neethu Reghukumar | CNN-News18

Updated:May 23, 2017, 7:36 PM IST
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Kerala Port Project Lopsided in Favour of Adani Group: CAG Report
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Thiruvananthapuram: A CAG report has found that the interest of Kerala were not protected adequately while drawing up the concession agreement in the Vizhinjam international Deep water Multipurpose sea project.

The agreement was signed between the state Government and Adani ports and SEZ private ltd for implementing the Rs 7525 crore project.

The report was tabled in the assembly on Tuesday.

The report states that while the standard concession period for Public Private Partnership projects is 30 years, but in the current agreement it is 40 years. Due to this, the Concessionaire (Adani Group) will be collecting an additional revenue of Rs 29, 217 crore.

It also states that Kerala will bear a disproportionate burden of 67 percent of the total investment in the project. This will allow the concessionaire (Adani Group) to recoup their investment of Rs 2, 454 crore in 11 years once it is operational, by 2030.

Thus, ideally the revenue sharing agreement should start from 2031, but by the agreement has postponed it to the 15th year so the state will forego a revenue of Rs 2,153 crore, allowing undue benefit to the private partner.

Addressing a press conference, Amar Patnaik, Principal Accountant General, said when projects are implemented in PPP model, the risks and benefits have to be shared by both the partners equally. This agreement was done in such a way that possibly one partner is running away with all the benefits.

The report comes a day after CPM veteran leader V S Achuthanandan demanded a white paper from the government on the project agreement signed during the previous congress-led UDF government. He also alleged corruption in the deal of the project.

It was a dream project of the state from 1991, when it was first proposed when late K Karunakaran was the Chief Minister.

The project saw a push during the last UDF government and the agreement was signed with the Adani group in 2015. LDF, which was in the opposition then h ad objected to implementing the project in private sector and had leveled allegations of corruption in the deal.

Chief Minister Pinarayi Vijayan had stated earlier that the government would implement the project as there was no option before it other than to execute the project inked by the previous UDF government.

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| Edited by: Ashish Yechury
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