Development of Vizhinjam International Multipurpose Seaport Project regarding

**Office Memorandum** **Date:** 24th November 2020 **Subject:** Record of Discussion of 84th Meeting of Empowered Institution (EI) under the Scheme for Financial Support to PPPs in Infrastructure (Viability Gap Funding Scheme). The document encloses the record of discussion from the 84th Meeting of Empowered Institution (EI) held on November 12th, 2020, at 3:00 PM via VC, under the chairmanship of the Additional Secretary (Investment), DEA. The meeting focused on the Vizhinjam International Deepwater Multipurpose Seaport Project. **Key Discussion Points:** * The proposal for the "Development of a minor sea port at Vizhinjam on DBFOT basis" was previously considered in the 57th EI meeting and later accorded In-Principle approval, recommended for FM approval in the 23rd EC meeting held on 26.12.2014. * The In-Principle approval of FM for the captioned proposal was conveyed to GoK by DEA vide OM dated 3.2.2015 with revised TPC of Rs 4089 crore and the applicable VGF. * Changes made after EC Approval, including modifications in the description of funded works (increasing cost from Rs. 1,210 crore to Rs. 1,463 crore) and the inclusion of mortgage clauses. * JS (IPF), DEA, highlighted CAG observations regarding the award of funded works to the Concessionaire without market rate assessment. * NITI Aayog noted that changes were made after DEA's VGF scheme approval. GoK responded that the cost revision for the EPC contract was not due to exchange rate fluctuations and clarified the bidding process. * DEA informed that CAG observed that pre-qualification criteria (PQ) should be framed to attract reputed firms. The document outlined changes between the RFQ and RFP/Draft Concession Agreement (DCA) related to the project model, concession period, total project cost, construction of breakwater & fishing harbour, port estate development, mortgage of project assets, and port capacity. * CAG observed that changes not incorporated in the RFQ/DPR/Master Plan favored qualified bidders. * The Chair requested GoK to clarify on CAG observations and provide documentation justifying changes made after EC (DEA) approval, ensuring compliance with CVC guidelines. **Further points included discussion on:** *Port Estate Development; *Bidding Process & Conditions Precedents; *Concession Period; *Tariff Structure; *Revenue Share; *Capacity **Attendees:** A list of attendees with their respective designations is attached as Annexure. * Shri K Rajaraman - Additional Secretary (Inv), DEA – in Chair * Shri Baldeo Purushartha - Joint Secretary (IPF) * Shri Sanjay Kaul - Secretary, Port Department, Govt of Kerala * Shri S. K. Saha - Adviser, NITI Aayog * Shri Arvind Choudhary - Adviser, Ministry of Shipping * Shri Mukesh Kumar Gupta - Director (PPP) * Ms. Shivali Chouhan - Director, Department of Expenditure * Shri Manoj Kumar Madholia - Deputy Director (PPP), DEA * Shri Arun Dewan - OSD (PPP), DEA * Ms. Nidhi Arora - Consultant, NITI Aayog **Distribution:** The memorandum is addressed to: 1. Shri. Rajeev Ranjan, Additional Secretary, D/o Expenditure, North Block, New Delhi 2. Shri S.K. Saha, Adviser, NITI Aayog, Yojana Bhawan, New Delhi 3. Shri Arvind Chaudhary, Eco. Adviser, M/o Shipping, Transport Bhawan, New Delhi 4. Shri Sanjay Kaul, Secretary, Fisheries & Ports (E) Department, G/o Kerala, Thiruvananthapuram Copies are also sent to: 1. PPS to AS (Investment), DEA 2. PPS to JS (IPF), DEA **Contact Information:** Mukesh Kumar Gupta, Director (PPP) F. No. 2/2/2018-PPP Government of India Ministry of Finance Department of Economic Affairs PPP Cell North Block, New Delhi 110001.

Key Entities Referenced