India clears viability grant for Vizhinjam port project

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India clears viability grant for Vizhinjam port project

The Vizhinjam International Deepwater Seaport (VISL) container terminal PPP project in India has finally got viability gap funding (VGF) from the government of India.

VGF is a one-time grant given by the central government to support PPP projects in infrastructure that are economically justified but fall short of financial viability. The amount of VGF will be equivalent to the lowest bid for capital subsidy, but limited to a maximum of 20% of the total project investment. This will amount to Rs8 billion (US$130 million).

The VGF approval allows Kerala government to call for price quotations from short-listed bidders. Five teams have been shortlisted for the project. These are:

The port will be one of the largest ports in the world. The port is envisaged to provide a total of 2000 m of quay length in three phases. The project involves the development of a container transshipment terminal with a capacity to load 600,000 twenty foot equivalent units (TEUs) a year initially, which can be scaled up to 1 million TEUs as per demand.

The project will be developed on a design, build, finance, operate and transfer (DBFOT) basis. It will have a contract period of 40 years which can be extended by another 20 years.

The total project investment is estimated at Rs40.5 billion (US$650 million).

Vizhinjam is a locality of Thiruvananthapuram city in the state of Kerala. Vizhinjam is a natural port, which is located close to the international ship route.

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