Resolution Reached: Vizhinjam Port Dispute Settled for Accelerated Construction

In a recent Cabinet meeting, a decisive move was made to resolve the ongoing dispute between the government and the Adani Group concerning the delayed construction of the Vizhinjam International Port. The decision aims to expedite operations and ensure timely profit sharing and central assistance. Recognizing the importance of the project for the state’s development, the government has chosen to settle the dispute in the public interest. The Chief Secretary has been appointed to oversee this resolution.

The dispute arose when the Adani Group failed to meet the December 3, 2019, deadline stipulated in the construction contract. After the government rejected the group’s request for an extension, arbitration proceedings were initiated. However, considering the potential for protracted litigation and the risk of losing the Viability Gap Fund from the Centre, the government opted for a negotiated settlement. The proposed conditions include a five-year extension for project completion, with a new deadline set for December 3, 2024. Additionally, a tripartite agreement will be signed, unlocking the Viability Gap Fund of Rs 817.80 crore sanctioned by the Centre, provided Adani Group withdraws from arbitration proceedings. The second and third phases of the project, involving a substantial investment of Rs 10,000 crore by Adani Group, are slated for completion by 2028, while revenue sharing is set to commence in 2034.