APSEZ to Expand Vizhinjam Port Capacity by 2028 in Kerala Deal

Adani Ports and Special Economic Zone Ltd (APSEZ) has agreed to expand the capacity of the under-construction international container transshipment port at Vizhinjam in Kerala by 2028, much earlier than stipulated in the concession agreement. This agreement was made in return for settling an arbitration case initiated against the state government due to delays in completing the first phase of the port and a five-year extension of the concession period until 2060.

The capacity expansion will allow Vizhinjam Port to handle 3 million TEUs from a 2 km long berth. The Kerala government has agreed to tolerate a five-year delay in completing the first phase of the port until December 3, 2024. As part of the agreement, the state government will retain Rs 219 crores due to APSEZ as a “deposit of commitment fee” until specific project phases are completed.

The consent order passed by the tribunal also paves the way for agreements between APSEZ, the lead bank, and the Department of Economic Affairs for the disbursement of Viability Gap Fund (VGF) for the project. The project, seeking a VGF of Rs 1,635 crores, was granted to APSEZ in 2015, with the Union government and the Government of Kerala contributing to the fund. The VGF is aimed at supporting economically justified but financially unviable infrastructure projects.

Source .