Green nod for second, third phases of Vizhinjam port expansion likely in March

The Vizhinjam International Seaport which started operations in December 2024 is expected to receive environmental clearance for the second and third phase of the port’s development in March. A public hearing on the Environmental Impact Assessment (EIA) report submitted to the Expert Appraisal Committee for obtaining Environmental Clearance for the next phases of development was held in New Delhi on Thursday.

It is not known what happened at the meeting of the Expert Review Committee of the Ministry of Environment, Forests and Climate Change (MoEFCC) on projects related to infrastructure development and the Coastal Management Area. However, the project consultant, Vizhinjam International Seaport Limited (VISL), a special purpose vehicle (SPV) was formed to implement the Vizhinjam deep water multipurpose port on a public-private partnership basis, along with the port concession Adani Vizhinjam Ports Private Ltd ( AVPPL) are hoping to get the nod in March, according to sources.

The Expert Appraisal Committee will have to recommend the Environmental Clearance project, and the final approval should be given by the Ministry of Environment and Forests based on the recommendation. Once the green nod is given, an upgrade of up to ₹10,000 crore will be made by AVPPL as part of expanding the shipping port for deep containers. The Kerala government has recently entered into an additional concession agreement with AVPPL, advancing the second and third phases of the project to 2028 instead of the 2045 deadline stipulated in the original contract agreement.

The supplementary agreement was signed as part of ending the arbitration proceedings between AVPPL and the State government over the delay in the project, which has seen a delay of five years.

However, the ongoing conflict between the State and the Center over the Viability Gap Fund (VGF) has been delaying the tripartite agreement to be signed by the State government, AVPPL, and the Centre. The premium sharing agreement is part of a three-part agreement. Signing a three-party agreement is required to complete the arbitration process.

The Centre, which had earlier agreed to provide its VGF share of ₹817.80 crore to the port operator, is yet to pay after the Center insisted that Kerala would have to return the Centre’s VGF share, a point which Kerala strongly rejected. Of the 8,867 crore project in phase I, ₹5,595 crore is to be borne by the State government. The State’s contribution includes its share of VGF, construction of access road, railway connection, land acquisition, and compensation for loss of life. So far, the State has spent R2,159.39 crore, while Adani has contributed R2,454 crore. Once the second and third phases of the project are completed, the port will see container handling capacity increase to 30 lakh TEUs (twenty-foot equivalent units) from 10 lakh TEUs in Phase I.