Thiruvananthapuram: The Kerala government has decided to guarantee the loan taken from HUDCO for Vizhinjam port construction by including it in the budget. This decision was made during a cabinet meeting held on Monday.

Last year, the government had planned to take a loan of Rs. 3600 crores from the Housing and Urban Development Corporation (HUDCO) for the port construction. However, the loan was not approved as the state government did not accept HUDCO’s demand to include the repayment amount in the annual budget.

The government has re-approached HUDCO as it aimed to begin the port’s operations by Onam but was facing challenges in paying off Rs. 1000 crores owed to the Adani Group.

HUDCO had earlier proposed an interest rate of 8.45% to 9.15% for the loan. It is learnt that the loan amount that will be availed in the first phase would be Rs. 2000 crores. 

Government Liabilities:

The government is liable to pay Rs. 520 crores to the Adani group upon the completion of the second phase of artificial sea wall construction.

- An amount of Rs. 490 crores is to be paid to the Adani group as the state's share of the Gap Viability Fund.

- For the rail and highway projects, Rs. 360 crores will be required for land acquisition.

The government is liable for Rs. 425 crores that was taken from Kerala Financial Corporation (KFC) as an Interim Loan (This interim loan was earlier used to pay off the first phase payment that was pending to Adani Group). 

Rs. 1200 crores will be utilised for an underground railway line project that connects Vizhinjam port to Balaramapuram.