Affairs of state Kerala

Sea port or real estate?

Ninety-four-year-old Govinda Menon is an engineer who retired from the Kerala Public Works Department, and now lives in Thiruvananthapuram. Seventy years ago, when he joined the PWD service in Travancore, the work assigned to him was to supervise the survey of Vizhinjam coast, for a proposed Sea Port. Many years later, he is now happy that the Vizhinjam project is finally materialising.

R.V.G. Menon


Adani Ports & SEZ Ltd is the private partner in this PPP project. The estimated cost for the Phase I is Rs. 4089 crore. Out of this they expect a grant of Rs. 1635 crore from the government. The Union Government has already sanctioned Rs. 800 crore as Viability Gap Funding (VGF) and the Government of Kerala has to meet the balance from other sources. GoK also has to find money for the construction of the break water, establishing connectivity, and acquisition of land.

Vizhinjam has the unique advantage that it is a natural all-weather deep water port, with depths of above 20 meters very near the coast. There is no need for regular dredging to keep the approach channel clear. Moreover, Vizhinjam is just 18 km or so from the busy international sea route from Europe and the Gulf region to East Asia. At present there are no ports in India which can berth ships with 18 meter draft. So such ships go over to Colombo and trans-ship their containers to smaller ships, which then carry them on to Indian ports. Obviously this is an avoidable expenditure and a deep sea all-weather port in India can result in savings of the order of Rs. 1000 crore per year for our traders.

The Travancore initiative fizzled out; but it was resuscitated by Ports Minister M.V. Raghavan, in 1991. There was a lot of opposition, but he reminded critics that if Vizhinjam was sidelined in order to favour Vallarpadam Container Terminal, then Tamil Nadu would retort with an international terminal project at Colachel.

When the Left government returned to power, it tried to go ahead with the Vizhinjam project, but there private parties did not show any initiative. In the mean time, opposition came from the fishing community and also some environmental groups. It was argued that the proposed port would create unavoidable and irreversible damage to fisheries and disturb the coast line. However, Indian National Centre for Ocean Information Services (INCOIS), which conducted a detailed study, reported that the proposed port will not harm the coastal region. Finally, environmental and CRZ clearances were granted and the Government of Kerala was free to go ahead with the tendering process. Even though a few companies expressed interest, only Adani Ports & CEZ came up with an actual bid. There was confusion whether it should be retendered or the order should be given to the lone bidder, until the Government of Kerala finally decided to place the order with Adani Ports & CRZ. Left parties have condemned the move because there was only one bidder, and that happens to be a favourite of Prime Minister Narendra Modi. However, no one can blame the government for not trying.

Looking back, one doesn't feel unduly worried about the environmental impacts often highlighted, other than the inevitable impacts of any port project. However, the Project Master Plan itself identifies two densely occupied fishermen's habitats in the neighbourhood, which will necessarily be affected by the project. The Report foresees no significant adverse impact on fishery activity in the region. This may or may not be the case.

Opportunities for local people

However, it stands to reason that the upcoming port and related activities will give rise to many opportunities for the local people. Whether the port results in dramatic economic development or not, it is inevitable that the social and economic life in the neighbourhood will certainly change. There is an ancient temple within the land assigned to the port. The Master Plan recognises its cultural importance and specifies that it has to be and will be protected. Whether it will really be, has to be watched, and one can only hope there will be some mechanism to see that this and other similar conditions specified by the Ministry of Environment and Forests will be observed by the port authorities. As per the agreement, Adani Ports & SCZ will start paying GoK a share of its profit (1%) after 14 years. The biggest worry is whether this port, designed primarily as a trans-shipment container port, will be economic, and whether the money invested by the government will be returned. If it is to be successful, inevitably it will have to attract traffic from Vallarpadam and Colombo.

That is a tough challenge indeed. The Feasibility Report itself says that this project will not be profitable by itself. That is why commercial returns from a third of the land allotted to the Concessionaire have been allowed to be diverted for real estate development. In other words, despite all the natural greatness of Vizhinjam, ultimately it is a real estate development project!

R.V.G. Menon is social commentator and former president of Kerala Sasthra Sahithya Parishad (KSSP)


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Printable version | Nov 23, 2021 3:33:03 AM | https://www.thehindu.com/news/national/kerala/affairs-of-state-sea-port-or-real-estate/article7464752.ece

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