Kerala   

Vizhinjam: State may go in for fresh bids

T. Nandakumar

If Indo-Chinese consortium fails to get clearance

Thiruvananthapuram: The Kerala Government is likely to invite fresh bids for the proposed international container transhipment terminal at Vizhinjam if the Indo-Chinese consortium that won the deal fails to gain security clearance from the Centre.

Minister for Ports M. Vijayakumar told The Hindu that the Government would have to exercise this option if the current bid was not cleared by the Cabinet Committee on Security.

Asked about Union Shipping Minister T. Baalu's comments on Monday that the Centre had no role in the Vizhinjam project, Mr. Vijayakumar termed it as unfortunate. "The Central Government is fully aware of the immense benefits of developing Vizhinjam as a transhipment terminal. It was the number one item in the memorandum submitted to the Prime Minister by the Cabinet delegation from Kerala. Besides, the Prime Minister was scheduled to lay the foundation stone for the project last month. He has promised to give a new date for the function soon," he said.

Mr. Vijayakumar said Vizhinjam was the only natural harbour with the potential to be developed as a deepwater terminal capable of handling giant container ships.

Last year, the State Government had sought political clearance from the Centre to allay national security concerns over the involvement of Chinese firms in the Vizhinjam project. A consortium including the Mumbai-based Zoom Developers and two Chinese firms, Kaidi Electric Company and China Harbour Engineering Company, has bagged the Rs.4,200-crore bid.

The Government referred the issue to the Centre because of the concerns raised by various Ministries and intelligence agencies over the increasing participation of foreign companies in domestic infrastructure projects. The same concerns have delayed the bidding process for the construction of an offshore container terminal in Mumbai and a second terminal at Chennai port. The Hong Kong-based Hutchison Port Holding is one of the major bidders for both the projects. The issue is now before the Cabinet Committee on Security.

Industry sources say a fresh bid for the Vizhinjam project would stand a better chance, given the renewed interest by global shipping and port handling companies like Maersk and PSA in developing new terminals.

Another factor that could influence the future of the Vizhinjam project is the recent takeover of the global ports and ferries group P&O by Dubai Ports, in a deal worth $6.8 billion. With the acquisition, most of the ports in India and the container transhipment hub at Colombo have come under Dubai Ports. Industry watchers are waiting to see how Dubai Ports, with both Colombo and Vallarpadam under its wings, views the Vizhinjam project. They feel that the projected volume of container traffic in the region would justify the need for a new hub. According to the project study for Vizhinjam, even if the Vallarpadam, Vizhinjam and Colombo terminals are fully developed, the container traffic would spill over to the Dubai and Singapore ports. Even a new hub at Colachel would be sustainable, according to the study.

Official sources however point out that developing a new container terminal at Colachel would be difficult in view of the rocky terrain and the continuous dredging to keep the shipping lane clear of silt. The Tamil Nadu Government is understood to be keen on the Colachel project estimated to cost Rs.5,500 crores.

The inherent advantage of a 24-metre draft endows Vizhinjam with the potential for development as a mega container transhipment hub capable of handling the giant post-Panamax class of carrier ships. The project is expected to save valuable foreign exchange to the tune of Rs.1,000 crores annually.

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