The State government proposes to develop the Vizhinjam international transhipment project without private participation.
The Cabinet, which considered the matter on Wednesday, gave its nod for talks with the public sector Shipping Corporation of India (SCI) which had expressed interest in investing in the second phase of the project. The SCI would form a consortium for the implementation of the second phase and may subscribe for equity in the project.
Details of the SCI's share participation and formation of the consortium would be worked out during the proposed talks. The Cabinet authorised Ports Minister V. Surendran Pillai and Chief Secretary P. Prabhakaran to hold the discussions.
The Minister told The Hindu that the advantage of the arrangement is that the government does not have to wait for Central clearance on bidders. This avoids complications and allegations in the award of contracts. All that is required from the Centre before taking up the work is environmental clearance. The government has already initiated the work for the first phase of the project. This includes development of infrastructure such as road and rail connectivity. The second phase involves the development of the terminal, which is being proposed as a landlord port. (At a landlord port, the port authority builds the wharves, which it rents out or leases out to a terminal operator. The operator invests in cargo-handling equipment and runs the terminal).The government will avail itself of a large loan from a financial institution for the development of the terminal and hopes to repay it over 10 or 15 years with budgetary support. Substantial equity participation is expected from the SCI.