India Finance
‘Cough up!’ says Kerala state to Adani after port deadline blowout
Jan 20, 2021
Deadline blowout - the construction site at Adani's Vizhinjam port redevelopment

An Adani company has been ordered to pay the Kerala state government a penalty fee after it failed to meet the deadline for completion of a major port complex.

The first phase of the troubled Vizhinjam container port project was supposed to have been completed on 3 December 2019. The concession contract allowed a period of leeway, but now that period is over and the state government has sent a notice to the company to pay the penalties due under the contract. The amount sought has not been publicly revealed, but a calculation based on the terms of the contract indicates that the government could be seeking as much as AUD $5.7 million.

This information was revealed by the state Ports Minister Kadannappally Ramachandran while replying to the query of Kovalam MLA M Vincent in the Kerala Assembly session of 8 January 2021. The minister added that Adani has informed him that a major portion of the port construction will not be completed until December 2021.

In a documented report, the minister said that only 20% of the 3100-metre breakwater construction and only 33 per cent of the 7.1 million cubic meters of dredging activity have been completed so far. In his written reply to Kerala MP PC George, the minister clarified that lack of sufficient rocks and the COVID-19 lockdown have caused delays in the construction.

The Minister claimed that the breakwaters and berths are being constructed in such a way as to withstand rough seas. He also claimed that the breakwaters will have a lifespan of 100 years. But prominent media have quoted officials from Adani Vizhinjam Port Private Ltd (AVPPL) saying that Cyclone Ockhi of 2017 had destroyed the breakwater and damaged the berths. The government had also presented this fact in writing at the Assembly in 2018. Adani itself has frequently referred to the damage caused by Cyclone Ockhi as a major reason for the blowout in construction time.

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