The government has asked the private multiport operator, Adani Vizhinjam Port Private Ltd (AVPPL), tasked with building and operating the international multipurpose deepwater seaport project at Vizhinjam, to pay ₹18.86 crore as damages for failing to achieve the second milestone of the project as per the concession agreement.
A notice in this regard to the AVPPL, the concessionaire, has been served for the government, which is the authority, by Vizhinjam International Seaport Ltd. (VISL), the special purpose vehicle set up to execute the project.
The ₹18.86-crore damages (at the rate of ₹12 lakh a day) has been sought from the AVPPL for having failed to spend ₹1,054 crore, which is 25% of the investment of the ₹4,216-crore PPP (public-private participation) component of the project, by October 24, 2017. The second milestone was to be achieved on the 690th day of the work started on December 5, 2015.
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“But the AVPPL could spend only 21.75% on the 690th day, which included a three-month grace period as per the pact. The concessionaire has claimed to have achieved 35%. But the parameters pointed out in support of the claim were deemed inadequate and hence the notice was issued,” official sources told
“This does not reflect the physical progress of the seaport project. The government had acted as per the provisions of the agreement signed on August 5, 2015,” an official said. The damages to be paid by the AVPPL will be returned on completion of the milestone. Commenting on the notice seeking damages, a spokesman of the AVPPL said, “We are not accepting it and will contest it.”
The decision to seek damages follows the government’s rejection of AVPPL’s request for more time for commissioning Phase I. The concessionaire had sought 16 months more, citing the damage to dredgers and access road, among others, during Cyclone Ockhi in November last year and the shortage of granite needed for construction of the 3.1-km breakwater.
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The 1,000-day target announced by the AVPPL after signing the concession agreement will end in December 2019, though the pact has a four-year deadline.