Ponnani may lose major port project as Kerala government, promoter clash

State had to terminate the contract with Malabar Ports because of the latter’s failure in implementing the ₹763-crore project in time, says MLA

November 24, 2022 09:20 pm | Updated November 25, 2022 08:59 am IST - MALAPPURAM

The Ponnani beach where the cargo port was planned. File photo

The Ponnani beach where the cargo port was planned. File photo

Ponnani appears set to lose a mega port project proposed way back in 2011, thanks to a long-drawn tussle between the State government and the private promoter who was to have constructed and run the port on build-operate-transfer (BOT) basis within a few years.

Although a concession agreement was signed in 2011 between the government and Malabar Ports Pvt. Ltd. (MPPL), the project did not take off as the signatories developed serious differences.

When Malabar Ports claimed that the government did not provide 29.30 acres as per the agreement, the latter said the developer delayed the project inordinately.

According to the agreement, Malabar Ports was to handle the design, engineering, construction and implementation of the project, including complete financing, and the State government only had to provide 29.30 acres.

Malabar Ports chairman Ramani Ramaswami said it had won all statutory clearances, including environmental clearance from the Centre, but it could not proceed with the work as the State government did not provide the required land.

However, government officials said the land issue was just a question of technicality. They added that the promoter was responsible for delaying the project whose original cost in 2011 was ₹763 crore. In 11 years, the cost has ballooned to ₹2,200 crore.

“The lackadaisical, careless, unprofessional and callous attitude of the government was responsible for this 300% jump in the project cost,” said Mr. Ramaswami.

Both the State government and the promoter have served termination notices on each other and are on the path of a legal collision.

Meanwhile, the government has mooted a multipurpose mini port at Ponnani. “We have done the feasibility study. At present, this is apt for Ponnani, the oldest historical port in Malabar,” said P. Nandakumar, MLA of Ponnani.

He added that the multipurpose mini port could handle both cargo and passengers in a limited way. “Being close to Lakshadweep, Ponnani can berth Laskadweep vessels in the initial phase,” he said. According to Mr. Nandakumar, the mini port will cost ₹70 crore for the first phase.

He added that the government had to terminate the contract with Malabar Ports because of the latter’s failure in implementing the ₹763-crore project in time. He also said that the promoters were incapable of fulfilling the project.

Malabar Ports officials, meanwhile, alleged that Mr. Nandakumar was leading as though he was an expert in ports and harbours. They said instead of supporting the BOT project, the MLA was trying to cause loss for the government by way of further project studies and reports. However, Mr. Nandakumar has denied the allegations.

According to Mr. Ramaswami, the State has lost one of the biggest opportunities for socio-economic development of Malabar. He warned that the State would further suffer a beating on its face of investor friendliness.

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