Kerala Government Accepts Central Assistance for Vizhinjam Port Amid Funding Dispute

The Kerala government has agreed to accept the central government's Rs 817.80 crore Viability Gap Funding for the Vizhinjam International Port project. The decision was made despite Kerala's request to receive the funds without repayment conditions, which the Centre rejected. Chief Minister Pinarayi Vijayan highlighted the financial burden of this condition.

The Kerala government has agreed to accept Rs 817.80 crore from the central government as Viability Gap Funding for the Vizhinjam International Port project. The decision emerged from a state cabinet meeting led by Chief Minister Pinarayi Vijayan.

This acceptance comes after the state had unsuccessfully requested the Centre to release the VGF share without attaching any repayment conditions, a plea that was ultimately rejected. Kerala's request, which hinged on the notion that the Vizhinjam project should be treated similarly to the Outer Harbour Container project at Tuticorin Port, was dismissed.

Chief Minister Vijayan previously wrote to Finance Minister Nirmala Sitharaman, indicating that the imposed condition could lead to a significant financial burden of Rs 10,000 to Rs 12,000 crore for the state. The letter highlighted that the Tuticorin project's similar financial framework did not attract a repayment condition.

(With inputs from agencies.)