The delay in completion of the first phase of the port project is turning out to be a political controversy, with the Congress alleging that the Left government is helping AVPL wriggle out of its commitment.
Adani Vizhinjam Ports Limited (AVPL), the holding company of the multi-purpose deep seawater Vizhinjam port in Kerala, is all set to miss its deadline to complete the first phase of project this month.
The delay in completion of the first phase is turning out to be a political controversy with the Congress, which heads the Opposition United Democratic Front (UDF) in Kerala, alleging that the Left Democratic Front (LDF) ruled by the Communist Party of India-Marxist (CPM) is helping AVPL wriggle out of its commitment.
Last week, senior Congress and Opposition leader Ramesh Chennithala told the media that the state government should collect compensation from the Adani Group after the “cure period” of 120 days for the project gets over.
He also charged Chief Minister Pinarayai Vijayan with not finding time to enquire about the project’s progress.
One of the serious allegations against AVPL, according to Chennithala, is that the company has only made use of the government’s allocation of Rs 5,071 crore and not spent any of its own money. The state government has also allocated 500 acres for the port. The Rs 7,525-crore port project was launched during the UDF term in 2015.
The project had a 1,000-day deadline to complete the first phase and berth the first ship. As per the agreement provisions for the construction of the port, AVPL will have to pay Rs 12 lakh a day after the “cure period” of 120 days for non-completion of the project.
M Vincent, member of the legislative Assembly from Kovalam, where the project is coming up, says the state government is trying to save AVPL by pointing out to damages caused by Ockhi cyclone in 2017 and non-availability of rocks for breakwater construction.
In November 2017, the devastation of the Ockhi cyclone affected the works of AVPL and washed off a major part of the work completed by the company.
On its part, AVPL will likely invoke the “Force Majeure” clause in the project agreement to shield its interest. “Force Majeure” is a legal provision that provides an exemption to a person from contractual obligation in the event of an event occurring beyond its control.
For example, in trade, “Force Majeure” is often used by sellers when the shipments are affected by bad weather or delay at ports due to events like strikes or even transport problems.
Besides Ockhi cyclone, AVPL will likely invoke the “Force Majeure” provision for the shortage of rocks for constructing breakwater caused by a ruling of the National Green Tribunal (NGT).
In December last year, the NGT struck down the powers of the District Expert Appraisal Committee (DEAC) to grant environmental clearances. AVPL had obtained the DEAC nod for mines to sources rocks for the breakwater construction.
This forced AVPL to move the State Expert Appraisal Committee for approval but it took time.
As a result, the mine at Kollam that should have been operational in December 2018 was able to start functioning only from June this year.
AVPL had sought permission for 21 mines. The delay that began with getting permission to mine rocks from Kollam extended to other mines too.
The port has to construct breakwater, which softens the intensity of the waves near the port site, for 3.1 km but not even half of it is complete. Nearly 80 per cent of the port works is complete and AVPL authorities are hopeful of getting the port running by October next year.
Vizhinjam will be India’s deepest port with the proposed berths being dredged up to 72 feet. The port, when it starts functioning, will offer stiff competition to Colombo port to offer berths to mother ships.
The Adani group has won a 40-year concession to design, build and operate the port.
Earlier, the project came under investigation by a three-member judicial commission headed by retired Justice C N Ramachandran Nair following Comptroller and Audit General observations on some lapses in the agreement the state signed with AVPL.
The commission concluded that there was no corruption and gave a clean chit to former chief minister Oommen Chandy. It also said that no one produced any proof of corruption either against Chandy or others involved in the project.