The board of directors of Vizhinjam International Seaport Limited (VISL), on Thursday, decided to invite the consortium led by Welspun Infratech Limited (India) for another discussion to see whether it would scale down its demand for a grant of Rs.479.54 crore to operate the proposed port.

The consortium, in its financial bid for taking up the role of the port operator, had quoted the provision of this grant from the State government for operating the port for 30 years. The grant is to be given over 16 years.

Since only one bidder is in the fray, price discovery has become difficult. This is, apparently, making the job difficult for the decision- makers.

VISL, the government entity promoting the project, had called the consortium for negotiation earlier. That meeting did not go the way the VISL and the government expected.

The board meeting, on Thursday, decided to give another try before floating another global tender.

Investment

The investment estimated for the first stage of the project, to be developed under the landlord model, would come to Rs.4,010 crore. The port operator is responsible for building the superstructure of the port, which would entail an investment of Rs.970 crore. After 30 years, the port will become government property free of lease encumbrances.

One thinking in the government and the VISL is that there is no hurry in deciding on the port operator since the role of the port operator will come only when work on the basic infrastructure, which is the VISL’s responsibility, has progressed to a certain stage. Once environmental clearance is received, more bidders may show interest in the project.

The financial advisors to the project, however, have pointed out to the government the advantages of choosing the port operator early.

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