Thiruvananthapuram: The Budget presented in Kerala Assembly for the year 2024-25 by Finance Minister KN Balagopal did not sit well with various departments. Many ministers overseeing these departments have begun expressing their displeasure openly. The major setback in the state government’s budget allocation this year comes from the disproportionate distribution of funds among various departments.
One of the main concern in the budget presentation this year pertains to the fund allocation for Vizhinjam International Port project. Reports indicate that the allocated funds are way too less for the comprehensive construction and development of the port across all its phases.
Despite hailing Vizhinjam as a prestigious project by the Finance Minister, there is concern that the delay in government allocation of funds will affect the speed of construction of Vizhinjam International Port. Uncertainty in disbursing the Viability Gap Fund (VGF) is also affecting the construction activities. Currently, the department is in the process of forming a cooperative consortium with other groups with the objective of pooling their resources.
The Viability Gap Funding (VGF) Scheme supports infrastructure projects that are economically justified but fall marginally short of financial viability. Support under this scheme is available only for infrastructure projects where private sector sponsors are selected through a process of competitive bidding.
The government claims that the construction will be completed in May this year and the Vizhinjam port will be commissioned by December. Adani Ports has to bear Rs 2454 crore for the first phase of the port construction. Rs 1635 crore should be provided by the state government as VGF. The state government also has to provide Rs 1754 crores for the construction of embankment and fishing harbor. So far, the state has transferred only Rs 707 crore for construction purposes where as Adani Ports has allocated more than Rs 4000 crore for the port.
The construction company has been constantly approaching the government with the demand to release the due amount immediately. It is the state government that should take the lead in making the VGF amount available. The department minister himself had informed that there was an agreement with the finance department to allocate Rs 100 crore to Adani Ports immediately.
But the truth is that apart from hailing the Vizhinjam project in the budget presentation, the fund allocation for the project was not enough to constitute a distribution in allocating funds for the construction and development of Vizhinjam port.
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