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Tuesday, Aug 23, 2005

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Kerala to focus on three port projects

Mony K. Mathew

With the Vizhinjam project having overcome the hiccups to attract a couple of bids, the Government has narrowed down its focus on two other ports, namely, Beypore and Azhikkal, that have moved ahead in the bidding process.

A view of the Vizhinjam harbour in Thiruvananthapuram

Thiruvananthapuram , Aug. 22

AS the bidding process for the proposed international container trans-shipment terminal at Vizhinjam finally gets rolling after much delay and bouts of uncertainties, the Kerala Government is resetting its priorities in the matter of development of minor ports in the State.

The programme, originally chalked out way back in 1995, covered seven ports dotting the long coastline of the State, with each of them at vantage locations to cater to a wide spectrum of cargo movements as also passenger traffic. The ports that were to be developed with private participation were: Vizhinjam, Thangassery, Munambam, Alappuzha, Ponnani, Beypore and Azhikkal.

But the long haul over the years has seen to it that a major chunk of the development plan has got stuck in the paper itself and that only a few of them have the chance to progress beyond in the medium term. With the Vizhinjam project having overcome the hiccups to attract a couple of bids, the Government has narrowed down its focus on two other ports, namely, Beypore and Azhikkal, that have moved ahead in the bidding process.

In the case of Beypore port, the Government had signed a memorandum of understanding with Kozhikode-based Parisons group at the global investors meet in Kochi in 2002 and the company has since submitted a techno-economic bid prepared in association with PricewaterhouseCoopers. The Ports Department, in turn, has roped in IL&FS to draft the concession agreement, which it hopes to conclude in a month's time.

The total cost of the project, estimated at Rs 500 crore at the outset, has now been scaled down to Rs 200 crore. In the first phase costing Rs 35 crore, the proposal is to increase the length of the existing berth and also deepen the draft.

The current thinking on the part of the Government is to float a special purpose vehicle (SPV) to implement the project. This stems from the fact that the Government has already spent money for establishing some of the existing infrastructure such as the breakwaters and the berth. This is to be treated as the Government's equity in the proposed SPV.

The port, being close to the industrial belt of Coimbatore and Palakkad, is reckoned to have good potential for cargo movements.

Besides, most of the cargo for Lakshadweep islands is handled at this port.

The Azhikkal port in Kannur has had a chequered run since being mooted and at one point of time, four companies had evinced interest in the project. However, the Sharjah-based Universal Lubricants is the only one that has stayed on the scene.

The cost of this project has also been substantially brought down from the originally estimated Rs 1,200 crore after a detailed study of the traffic potential of the port. Also, the project is now proposed to be implemented in modules.

The first module, which is expected to cost Rs 360 crore, envisages construction of six or seven berths

The proposal by Universal Lubricants is to build a petroleum, oil and lubricants (POL) jetty at the mouth of the port.

In the initial years, the Azhikkal port was seen to be in for rapid development in the wake of a proposal by K.P.P. Nambiar and Associates to set up a naphtha-based combined cycle power plant in the vicinity.

The port was then planned to be developed mainly for handling the naphtha required for the power project. The proposal, however, did not take off, throwing the port development plan into prolonged hibernation.

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