Mumbai: India’s central government has cleared viability gap funding (VGF) for the long-delayed international port project and container transhipment terminal project at Vizhinjam, in Kerala.
This is the first time that a one-time grant of this type has been accorded to a port project in the country. The INR40.50bn ($655m) project is proposed to be set up through the 40-year design, build, finance, operate, and transfer (DBFOT) route.
The VGF component for the project is estimated to be a little over INR8bn, the central government’s share. The State government can decide to put up an equivalent share of its own. This would raise the viability of the multi-billion rupee project, the biggest infrastructure project yet in Kerala state.
The approval has come right in time for five bidders looking at the February 20 deadline for submitting the final bid to build the port superstructure and 600,000-teu container transhipment terminal, which can subsequently be scaled up to 1m teu.