Kerala accepts Central Government's ₹817.80 crore Viability Gap Fund for Vizhinjam Port

Thiruvananthapuram: The Kerala government has decided to accept ₹817.80 crore from the central government as Viability Gap Funding (VGF) for the Vizhinjam International Port project.

This decision was made during a state cabinet meeting chaired by Chief Minister Pinarayi Vijayan on Thursday.

According to a statement from the Chief Minister's Office (CMO), the central government has set a condition that the state must repay the amount under the Net Present Value (NPV) model.

Previously, Kerala had requested the Centre to release the VGF share without any repayment conditions. However, the Union government declined, stating that the Vizhinjam project could not be compared to the Outer Harbour Container project at Tuticorin Port.

Chief Minister Vijayan had earlier written to Finance Minister Nirmala Sitharaman in October last year, urging her to release the funds without the repayment condition.

He argued that the condition imposed by the Department of Economic Affairs' Empowered Committee would result in a financial burden of ₹10,000 to ₹12,000 crore for the state.

He also pointed out that a similar repayment condition was not applied to the Outer Harbour project at Tuticorin Port, which follows a similar financial structure to the Vizhinjam Seaport.

PTI