Kerala CM Pinarayi Vijayan Seeks Financial Support for Vizhinjam Port
Request to Union Finance Minister
Kerala Chief Minister Pinarayi Vijayan has reached out to Union Finance Minister Nirmala Sitharaman, requesting the release of the Centre’s share in the Viability Gap Funding (VGF) for the Vizhinjam International Seaport. He urged that this funding be provided without the condition that the state must repay it later.
Background on Vizhinjam Port Project
The Vizhinjam Port was the first in India to receive in-principle approval for VGF on February 3, 2015, under the Scheme for Financial Support to Public Private Partnerships in Infrastructure. The Department of Economic Affairs’ Empowered Committee recommended the project for final approval, allocating Rs 817.80 crore.
Concerns Over Repayment Conditions
The Chief Minister highlighted that VGF is typically a non-repayable grant, not a loan. He argued that the condition for Kerala to repay the VGF contradicts the purpose of the funding. Kerala is investing Rs 5595 crores in the project, and repayment would result in a significant financial burden, estimated at Rs 10,000 to 12,000 crores.
Comparison with Other Projects
Vijayan noted that a similar condition was not imposed on the Outer Harbor project of VOC Tuticorin Port, which received approval in November 2023. He requested the same consideration for the Vizhinjam project to prevent financial loss to Kerala.
Doubts Revealed
Kerala CM -: Kerala CM stands for Kerala Chief Minister. The Chief Minister is the head of the government in the Indian state of Kerala.
Pinarayi Vijayan -: Pinarayi Vijayan is the current Chief Minister of Kerala, a state in India. He is a leader of the Communist Party of India (Marxist).
Finance Minister -: The Finance Minister is a government official responsible for managing the financial affairs of a country. In India, Nirmala Sitharaman is the current Finance Minister.
Nirmala Sitharaman -: Nirmala Sitharaman is the current Finance Minister of India. She is responsible for the country’s economic policies and financial management.
VGF -: VGF stands for Viability Gap Funding. It is a financial support provided by the government to make projects financially viable, especially when they are not profitable on their own.
Vizhinjam Port -: Vizhinjam Port is an international seaport being developed in Kerala, India. It is intended to handle large ships and boost trade in the region.
VOC Tuticorin Port -: VOC Tuticorin Port is another major port in India, located in Tamil Nadu. It is named after the Indian freedom fighter V.O. Chidambaram Pillai.