Kerala extends Vizhinjam Seaport development timeline by 5 years in new deal with Adani

The Kerala government signed a supplementary concession agreement with Adani Vizhinjam Port Pvt Ltd, extending the development period of the Vizhinjam International Seaport by five years, chief minister Pinarayi Vijayan announced on Thursday. Vijayan said the first phase of the project will be commissioned next month.

Subsequent phases are slated for completion by 2028, with an additional ₹10,000 crore investment boosting the port's capacity to 30 lakh TEUs (Twenty-foot Equivalent Units).

“We have entered a supplementary concession agreement with Adani Vizhinjam Port PVT LTD on @PortOfVizhinjam to extend the project period for 5 yrs & commission the port by December. As the 2nd & 3rd phases near completion by 2028, an investment of ₹10,000 crore will be made, expanding the port's capacity to 30 lakh TEU,” the Kerala chief minister posted on X.

“This milestone underlines our commitment to comprehensive development & global connectivity,” he added.

Addressing a press conference, Kerala Port Minister V. N. Vasavan noted that the government will now begin receiving revenue shares from the port five years earlier than previously scheduled. Under the original terms, the state's revenue share was set to commence 15 years after operations began, which would have been in 2034. However, project delays Covid-19 pandemic and natural disasters pushed this to 2039.

“However, under the current agreement, the government will start receiving a share of the revenue from the port as early as 2034. This means that even with delays in construction, the government will receive more revenue than initially planned from Adani Port Company," the minister said.

The minister also highlighted that, unlike the prior arrangement where revenue was based solely on the first phase, the new deal encompasses all four phases.

“Since the construction of all phases is expected to be completed by 2028, the profit share from the total revenue, once all four phases are operational, will be provided by the Adani Company to the government starting in 2034," Vasavan said.

Due to delays, a penalty of ₹219 crore has been imposed, with ₹43.8 crore to be paid to the state, reported PTI. The remaining amount will be withheld until 2028.

If the project is not fully completed by 2028, the five-year extension will be cancelled, and the withheld amount will be collected by the government.