Vizhinjam port project unlikely to be affected by Adani rout; Airport's expansion might take a hit

The industry is hopeful as Adani Group has already invested its share in the project

The Adani issue has raised questions regarding the future of the upcoming Adani-Vizhinjam international seaport project in Kerala. The industry, however, is hopeful that since Adani Group has already invested its share in the project it will remain unaffected by the controversy.

According to sources, while the commitment of Adani Group as per the initial agreement was around Rs. 2,900 crore, it has already invested around Rs. 3,600 crore. For the project to be operational only Rs 800 crore is required. The state and the centre are bound to contribute around Rs. 1,600 crore toward viability gap funding.

The Kerala government is yet to pay Rs. 350 crore that was due to Adani Group for construction of breakwater.

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These factors indicate that the project which that is to be made operational this year will not face any obstacle. The Vizhinjam port is considered as a game changing project in Kerala's development plan.

Kerala Chief Minister Pinarayi Vijayan addressed the concerns in a press conference and said the matter need to examined.

An official at Kerala ports minister's office said that there was no reason to worry over the port project. "Steps to give around Rs. 350 crore towards construction of breakwater and claiming the VGF from the centre are in progress," he said.

Even as Adani authorities are yet to make any official comments over the matter, sources close to the group said that existing infrastructure projects might not be affected by the crisis. Only future expansion plans could be affected.

Except for breakwater and berth, 95 percent of the work for the first-phase has been completed. Of the 2.4 kilometre breakwater required for the first-phase, 1.6 kilometre was completed and work on the remaining portion is progressing. Breakwater work was affected owing to shortage of rocks, which was also being addressed by the government, said sources.

Meanwhile, Adani's crisis could affect expansion plans of Thiruvananthapuram airport, which is run by the Adani group at present.

A proposal to develop the international terminal of the airport as an integrated terminal of international and domestic operations by acquiring more land was pending for quite some time. There were reports that Adani group would acquire lands and take forward the project. But owing to the crisis, it is unlikely to take place until the crisis is over.

The Thiruvananthapuram airport witnessed considerable increase in users and flights over the last one year. There was 83.6 percent growth in passenger movement and 31.53 percent growth in flight movements in this January compared to the 2022 January. Twelve new international services and ten domestic services were introduced during the last one year, a statement from the Adani group on Sunday said.