Adani inks port pact with Kerala

MUMBAI: The Adani Group on Monday signed a memorandum of understanding (MoU) with the state government in Congress-ruled Kerala to build and operate the Vizhinjam International Seaport, the eight such project undertaken by the conglomerate.
The group chairman, Gautam Adani, has promised to make operational the Vizhinjam mega transshipment container terminals within 1,000 days from the start of construction on November 1, 2015.The project was conceived over 25 years ago but had failed to take off as three rounds of prior bidding got no commitment from any serious developer. "I congratulate the government of Kerala for this bold step of awarding the project to the Adani Group in spite of the bidding process resulting in just one bid," said Adani.
Vizhinjam, with its strategic access to the Middle East, the Suez Canal, the coast of East Africa, Bay of Bengal and the Straits of Malacca has an unmatched location advantage. This, coupled with the strong growth of India and the subcontinent, makes it one of the most exciting ports being developed in the world.
"When I look back, I must admit that while we were contemplating this project, most people advised me against submitting the bid. As we all know, the project had been conceived over 25 years ago but had failed to take off," said Adani, adding that despite being the deepest natural draft port in the country and its strategic location, traffic volumes were uncertain and construction of the port in Kerala's backwaters was seen to be complex.
Adani believes that there was no reason why the ports of Colombo, Dubai, Salalah, Klang and Singapore should be transshipment hubs for 80% of India-related container cargo. It needs to be the other way: India should be the transshipment hub for cargo to other parts of the world, he said.
"We build ports to 'create' demand as compared to others that build ports to 'meet' demand. We see ourselves as demand generators that catalyse entire port-based economies within the surrounding hinterland," said Adani.
Adani Group has chosen Santosh Kumar Mahapatra, a former IAS officer who was instrumental in building the challenging Dhamra port in Orissa, to be the CEO for the Vizhinjam project.
Adani believes the single most important aspect for the success of the Vizhinjam port will be the relaxation of the cabotage law. "Enabling foreign flag vessels to do coastal shipping is a win-win situation that will help pooling of cargo, reduce freight cost, as well as increase tonnage on coastal routes. The government is aware that the existing cabotage laws can prevent the growth of a transshipment based port like Vizhinjam," said Adani.