The Trivandrum Chamber of Commerce and Industry has urged the State government to ensure equity participation of the Union government in the Vizhinjam port project.

In a memorandum submitted to Chief Minister Oommen Chandy and Ports Minister K. Babu, the chamber proposed that the Union Ministry of Shipping be given 51 per cent of the equity in Vizhinjam International Seaport Ltd., a State government-owned special purpose vehicle.

Chamber president E.M. Najeeb and secretary S.N. Reghuchandran Nair said that making the Union government the majority stakeholder would not hamper the development of the greenfield port estimated to cost Rs.4,010 crore.

“Under the landlord port model adopted for the project, basic infrastructure like dredging, reclamation, and construction of breakwaters and quay wall are the responsibility of VISL, while port operations will be handled by a private partner. The equity contribution of the government of India will transform VISL into a joint venture between the State and Central governments and ensure Central assistance in terms of funds, clearances, and other benefits without affecting the development process.”

Financial burden

The memorandum pointed out that the participation of the Union Ministry in the project would only lessen the financial commitment of the State government and make borrowing from financial institutions easier. “The statutory clearances required for the project can be speeded up. It will also increase investor confidence for further development,” it pointed out.

The memorandum said Vizhinjam would be classified as a major port if the Union government was allotted 51 per cent of the stakes in the project. It would ensure greater regional acceptance for the port. It, however, noted that the State government would have to request the Centre for exemption from the requirement of a large land bank to be considered for major port status.