Vizhinjam pact in favour of Adani: CAG

Unfavourable conditions in the concession agreement of the Vizhinjam seaport project have gone against the interests of the State government and to the advantage of Adani Ports and SEZ Private Limited, the Comptroller and Auditor General has said.

According to the latest report on public sector undertakings tabled in the Assembly on Tuesday, the CAG has listed a number of conditions unfavourable to the State. The standard concession period for PPP (public-private participation) projects is 30 years. But it has been fixed as 40 years. This would help the company collect an additional revenue of ₹29,217 crore.

As per the agreement, the concession period of 40 years can be extended by 20 years on the condition of capacity augmentation. The draft agreement had limited it by10 years. Had the government stuck to the 10-year norm, the State would have got ₹61,095 crore. Now the benefit would go to the company.

Excess equity support

Owing to the modification of the concession agreement on the premise of improving clarity without any demand from the prospective bidders on December 31, 2014, the government had to pay an excess equity support of ₹283.08 crore in advance, incurring an interest loss of ₹123.71 crore.

By affording the concessionaire, the right to mortgage all assets, the government has provided undue benefit to the company.

“The government was mixing and matching clauses as per convenience, all of which resulted in providing additional benefits to the concessionaire,” the report says.

The CAG has also taken note of deviations from the Central Vigilance Commission’s guidelines on pre-qualification criteria.

Tourism dept

The CAG has detected chinks in the Tourism Department’s empanelment of agencies for promotion and marketing of tourism. The process was beset with non-compliance to CVC guidelines and stores purchase manual of the State government. The CAG has detected amendments to tender conditions post-tender in violation of the CVC guidelines. Post-tender amendments coupled with absence of proper evaluation criteria led to selection of a singe agency for a major chunk of marketing activities of the department.

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Printable version | Sep 16, 2021 6:02:54 AM |

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