Former Chief Minister Oommen Chandy on Wednesday questioned the findings of the Comptroller and Auditor General of India (CAG) that several provisions in the agreement for the development of the Vizhinjam International Multi-purpose Deepwater Seaport were against the interests of the State.
Addressing a press conference here, Mr. Chandy said his government had adopted a very transparent process in selecting the developer at the end of the State’s fifth attempt in 25 years to get the project proposals off the ground.
As per plan panel model
At no point had his government deviated from the final draft agreement reached at the pre-bid meetings. The decision to allow a 40-year concession period was based on the Planning Commission’s model concessions for the development of State ports on PPP mode.
The CAG report was tabled in the State Assembly the other day. Mr. Chandy said the cost benefits of Vizhinjam could not be compared with the Kolachal port, for which tenders had not yet been invited. Moreover, plans were afoot now to drop Kolachal and develop another port.
The UDF government had followed elaborate procedures, including getting the agreement vetted by a leading lawyer with expertise in infrastructure development.
It had got the approval of the Union Finance Ministry for getting Viability Gap Funding. The CAG has only calculated the income from the project, but not the expenditure on the project. The cost of the first phase is covered by the Viability Gap Funding and the State government’s investment in constructing the breakwater. The cost of the second phase would be borne by the promoter.
Beneficial for State
Similarly, the State stood to gain a cumulative 25% revenue every year after 15 years of commissioning. Similarly, it would get 10% income from estate development up to 30% after seven years. However, the CAG had committed an oversight of not perusing these aspects, he said.
Mr. Chandy maintained that the Vizhinjam project had been implemented not with a profit motive, rather to ensure the realisation of a 25-year-old dream, which had failed to find good promoters till then. To the best of his knowledge, the CAG did not give an opportunity to the State government to explain its stand and whatever replies were given to its draft paragraphs had been rejected as unsatisfactory. The former Chief Minister refused to attribute political motives to the CAG findings. He also said that the agreement drafted by his government was far superior to the one drafted by former Chief Minister V.S. Achuthanandan.
‘Examine findings’
Mr. Chandy appealed to the Chief Minister to expedite his promise to examine the CAG’s findings to ensure that the port development stayed on course. He said he welcomed any kind of probe into the issue. He had taken a decision with the best of intention that would trigger the State’s development, he said.
