Vizhinjam: Satheesan Accuses Previous LDF of Waiving ₹219 Cr Penalty

Kerala Chief Minister V D Satheesan on Wednesday strongly rejected the CPI(M)'s allegation that the proposed transfer of a 49% stake in the Vizhinjam Seaport project to MSC was part of a "big deal", and accused the previous LDF government of waiving a penalty of about ₹219 crore that Adani Port was liable to pay for delays in completing the project.

Addressing a press conference after the Cabinet meeting, Satheesan said here that the government had not taken any decision on the proposed share transfer by the Adani Vizhinjam Port Private Ltd (AVPPL) to the Mediterranean Shipping Company and that the matter was being examined by an Empowered Committee headed by the Chief Secretary.

He said the state government would take a decision only after ensuring that Kerala's interests were fully protected.

"We have constituted an Empowered Committee. There is a procedure. The government will not take any decision that harms the interests of the state. Only a decision that protects the state's interests will be taken," he said.

Rejecting the opposition's allegation of a "big deal", Satheesan said, "Now they keep saying this is a big deal and all that. We have done nothing. We have not taken any decision." Turning the attack on the previous Pinarayi Vijayan-led government, he alleged that it had amended the concession agreement after the project missed its original completion deadline.

"Do you know what they did last time? Under the concession agreement, this project was supposed to be completed in 2019. It was not completed. If it wasn't completed, it should have ended in 2024. Instead, they amended the concession agreement and gave a five-year extension. By giving that extension, they increased the concession period from 40 years to 45 years," he said.

Satheesan claimed that the previous government had also waived the penalty payable for the delay.

"What does the concession agreement say? If they delay the project, they have to pay ₹12 lakh a day. Because of the five-year delay, the amount payable to the government under the penal provision came to ₹219 crore. They waived every single rupee of it. They waived it in two stages," the Chief Minister alleged.

"What kind of deal was that? ₹219 crore was the compensation due to the government. Under the penal provision, for the delay, at ₹12 lakh a day, over five years--1,825 days--if you multiply that by ₹12 lakh, it comes to ₹219 crore. I checked it on a calculator. It comes to ₹219 crore. They were supposed to pay that amount," he said.

When reporters pointed out that floods and COVID-19 had been cited as grounds for waiving the penalty, he said, "They said there were floods and COVID, so compensation should be waived." Satheesan questioned the justification, arguing that the floods and the COVID-19 pandemic had disrupted work only for a few months, whereas the concessionaire was granted relief for a delay of five years.

Responding to concerns raised by the CPI(M) over the proposed transfer of Adani's 49% stake to MSC, Satheesan said the government would examine the issue solely from Kerala's perspective.

"Our responsibility is to protect the interests of the state," he said.

Referring to the Leader of Opposition Pinarayi Vijayan's allegation that the move would create an MSC monopoly at Vizhinjam, he said the concession agreement itself contained safeguards.

"The opposition is speaking without even reading the concession agreement. The Leader of the Opposition said there would be a monopoly here--an MSC monopoly. The concession agreement itself contains protection against that. Clause 5.8 is there. It says there must be a common user facility and that there should be no monopoly. That clause is protected in our concession agreement," he said.

He reiterated that the government had not yet taken a decision.

"We will examine whether granting approval will in any way harm the interests of the state. Only after carefully examining every aspect will we take a decision." Taking a swipe at sections of the media, Satheesan urged reporters not to speculate on decisions before they were taken.

Satheesan also dismissed allegations by CPI(M) Kannur district secretary K K Ragesh that IAS officer Divya S Iyer was shifted from the Ports Department as part of the alleged deal.

Referring to differing views within the CPI(M), he said, "Didn't even the most senior CPI(M) leaders say that unnecessary allegations should not be raised in this matter?" Taking a swipe at former Law Minister P Rajeev's reported statement on Vizhinjam stake transfer, Satheesan claimed that he said there was no problem with handing over the transfer of stakes.

"Then what is the problem? What exactly is the problem? So they changed their stand. But you (media) didn't call that a 'U-turn'," Satheesan said.