AHMEDABAD : The much-delayed international container transhipment port at Vizhinjam near Thiruvananthapuram in Kerala will be fully commissioned by May 2024, Karan Adani, Chief Executive Officer, Adani Ports and Special Economic Zone Ltd (APSEZ), which is building the new port, has said.

“We expect the first vessel to berth in October this year, that’s when we expect the first equipment to come. We expect the Phase 1 of the port (400 metre quay) to be commissioned by March 2024 and the balance by May 2024. So, we expect the full commissioning of Vizhinjam Port by May 2024,” Karan Adani said on Tuesday after the company announced the fourth quarter and annual financial results.

The new port is designed to cut India’s dependence on nearby Colombo to send and receive container cargo.

According to the concession agreement signed on August 17, 2015, Vizhinjam port was slated to start operations on December 3, 2019.

Adani Vizhinjam Port Pvt Ltd (AVPPL), the APSEZ unit developing the port, has blamed force majeure events arising from acts of God such as the Cyclone Ockhi, high waves, a National Green Tribunal order, the pandemic, Cyclone Tauktae and reasons attributable to Kerala government authorities for the delay in achieving the scheduled commercial operation date (COD) set by the concession agreement for the project.

The delay and the reasons behind it are currently being heard by an arbitration panel.

The Vizhinjam project is entitled to receive a viability grant funding/equity support grant of Rs1,635 crore to be shared by the Centre (Rs 818 crore) and the Kerala government (Rs 817 crore) to boost its viability, making it the first and only port project to be offered such a grant. Of this, Rs1,227 crore will be given during the construction phase and the balance during the operation period spanning 40 years extendable by another 20 years.

Viability Grant Funding (VGF) is a one-time grant given by the Central government for supporting public-private-partnership (PPP) projects in infrastructure that are economically justified but fall short of financial viability.

The VGF was the basis on which the bid was awarded to Adani Ports and Special Economic Zone Ltd (APSEZ), which quoted the least grant of Rs1,635 crore in an auction in 2015.

The “in-principle” approval for granting VGF to the Vizhinjam port project was accorded by the Centre in February 2015.

Adani Vizhinjam Port has secured “final approval” from the Union Finance Ministry’s Department of Economic Affairs in October 2022 for the construction phase VGF of Rs1,227 crore.