'No fund crunch for Kerala port project'

'No fund crunch for Kerala port project'

It was in November last year that the Kerala government asked SBT to form a consortium of banks to raise Rs.2,500 crore, which will be the initial funding required for the much-delayed Vizhinjam International Container Terminal.

"The MoU (memorandum of agreement) with the government has been inked and from our part, we have had discussions with various banks in the state to be part of the syndicate to fund the project. At the moment, we have got confirmation from these banks to raise Rs.700 crore," SBT's chief general manager S. Balachandran told reporters here late Friday.

"Since banks have a limit to the total loan and the duration of the loan, SBT has decided to raise additional loan amount by way of floating bonds for the proposed port in partnership with SBI Caps (State Bank of India Capital Markets Ltd).
"Funds for the proposed port are not going to be an issue at all," added Balachandran. 

Chief Minister V.S. Achuthanandan had inaugurated the work for a connecting road to the Vizhinjam port site last year in August, signalling the launch of the first phase of the Rs.60 billion port project.

The state government has committed to develop the basic infrastructure, which includes rail and road connectivity to the port site, and has set aside Rs.450 crore for the purpose.

The Vizhinjam port is to come up near the famed tourist destination of Kovalam and the proposed site has a natural depth of 24 metres, one of the deepest in the world and hence requires no dredging.

It will be located close to a busy international shipping route, and is envisaged to handle 4.1 million containers annually.

The project has been hanging fire for well over nearly a decade. During the tenure of Oommen Chandy as chief minister 2004-06, the foundation stone was to be laid by Prime Minister Manmohan Singh but it had to be cancelled due to security reasons.
It got the necessary clearances for the second time last year but Hyderabad-based Lanco Kondapalli, which had won the bid to build the port, withdrew from the project -- citing indefinite delays and possible legal tangles.

The state government said in the assembly's last session that work on the proposed port will begin during the tenure of the present Left government.