Adani Group Extends Vizhinjam Port Operational Rights to 65 Years with Time Extension

In a significant development, the Adani Group is set to enjoy operational rights over the Vizhinjam port for a total of 65 years, following the Kerala government’s decision to extend the construction time period by an additional five years. Initially granted rights for 40 years, the group secured an extra 20 years by committing to fund the second and third phases of port development. An additional five years were granted as compensation for challenges faced during construction due to natural disasters. As a result, the Adani Group is expected to hold operational rights until 2075, eventually transitioning them to VISL (Vizhinjam International Seaport Ltd).

The Vizhinjam port construction, which began in 2015 with an initial completion target of December 2019, faced delays. The Adani Ports, under the initial agreement, was supposed to hand over operations to VISL in 2055. The extension beyond the standard 30-year operational rights under PPP norms drew criticism during the UDF government’s tenure, with accusations of a prolonged timeline.

As per recent information, VISL will start receiving profit shares from 2034, starting at 1 percent and gradually increasing to 25 percent. The Adani Group is poised to invest Rs 20,000 crores in the second, third, and fourth phases of development at the Vizhinjam port. The state government agreed to withdraw arbitration procedures after the Adani Group committed to completing the second and third phases of port development by 2028.

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