The Kerala government has decided to accept the central government’s share of Rs 817.80 crore as Viability Gap Funding (VGF) for the Vizhinjam International Port project. The decision was taken during a state cabinet meeting chaired by Chief Minister Pinarayi Vijayan.
According to a statement from the Chief Minister’s Office (CMO), the central government has set a condition that the state must repay the amount under the Net Present Value (NPV) model. Earlier, the Kerala government had requested the Centre to release the VGF share without conditions. However, the Union government rejected this request, stating that the Vizhinjam project could not be compared to the Outer Harbour Container project at Tuticorin Port.
Chief Minister Vijayan had earlier written to Finance Minister Nirmala Sitharaman in October last year, urging her to release the funds without the repayment condition.
He argued that the condition imposed by the Department of Economic Affairs’ Empowered Committee would result in a financial burden of Rs 10,000 to Rs 12,000 crore for the state. He also pointed out that a similar repayment condition was not applied to the Outer Harbour project at Tuticorin Port, which follows a similar financial structure to the Vizhinjam Seaport.
