Thiruvananthapuram: The Comptroller and Auditor General (CAG) has found that the clause in Vizhinjam container terminal concessionaire agreement granting Adani an additional concession period equal to three times the duration of the commissioning of the new port if a government agency opens any competing port within 100 km of Vizhinjam port before the 15th anniversary of Adani’s appointment is detrimental to the interest of the state. This is because the central government has decided to establish a port in Colachel, Tamil Nadu, 51 km from Vizhinjam.
This condition would not apply if the average traffic exceeded 90 percent of the existing capacity of the port in any year.
The term government instrumentality used in the concessionaire agreement to define government agency included the central government also. The state government had made it clear that the definition was as provided by the Ministry of Company Affairs.
The clause giving the concessionaire the power to collect fee at lower rate by giving public notice to users, specifically to all or any category of users, is also against the interest of the state. This clause would enable Adani to collect reduced or no fee from users of the choice. This would adversely affect the revenue share of the state government, as the concessionaire has the option of providing vessels of his choice to use the port facilities free of cost.
As per another clause, Adani has been given permission to sub-license the port estate development, including residential buildings, for a period co-existent with the concession period. The sub-licence will continue even if the concession period is completed. This is even after the directorate of economic affairs (DEA) directing the government to make the concession agreement co-terminus with the concession period. The state government has failed to address the specific concerns raised by DEA especially concerning the return of land to the state government on the completion of the concession period.
