State invites Adani Group to discussions on way forward for Vizhinjam project
The state government has invited the Adani Group to discuss how to move forward the Vizhinjam seaport project amid the protracted unrest led by the Latin Archdiocese of Thiruvananthapuram.
Previously, the Adani Vizhinjam Port Pvt. (AVPPL), the multi-port operator responsible for carrying out the ambitious project, has demanded the state to compensate for a loss of around ₹78.70 crore that it suffered due to the long strike.
The issue then snowballed into a controversy with Vizhinjam International Seaport Ltd. (VISL), the state government corporation overseeing the project, asking the state government to recoup the loss of the protesters in line with the High Court’s directive that the loss suffered by the state due to the political party protest must be recovered from the protesters themselves. The Latin Archdiocese challenged this decision by asking the State to compensate the damage suffered by the fishermen as a result of the port works.
After AVPPL’s letter, which stated that it suffered a loss of ₹1.5 crore per day during the strike period, Port Minister Ahamed Devarkovil invited AVPPL for a discussion on October 13, as the company would have communicated to the state government. that the deadline for the first phase of commissioning the port would be missed due to the strike.
Although the state government has not made any formal decision in favor of the Adani Group, the state is not against the proposal to extend the deadline for the project, sources say.
In fact, the project was supposed to be commissioned in 2019. According to the concession agreement signed between the port developer and the state government, the latter can collect liquidated damages for each day of delay in completion. of the project three months after the deadline set by the agreement. The liquidated damages payable to the state will amount to approximately Rs 12 lakh per day and Rs 3.60 crore per month.
After missing the 2019 deadline, the contracting company cited natural calamities such as two consecutive floods, cyclones including Ockhi, ban on quarrying and COVID-19 as Force Majeure (FM) – a event that is beyond the control of the parties and makes contractual performance impossible — request an extension of time until 2024.
Although the company then listed 17 issues as major reasons for the delay in works when it approached the arbitration tribunal to avoid paying compensation to the state government, the state did not accept their claims. and only admitted a loss of 34 days during the COVID-19 lockdown period. The concessionaire has also been asked to commission the first phase in 2023 itself.
According to a senior government official, the claim of loss submitted by AVPLL is arbitrary. Still, the company can complete the works by December 2023 if there are no more obstructions to the port works, but it is the responsibility of the state to ensure them.