NEW DELHI: Kerala’s chief minister Pinarayi Vijayan on Saturday wrote a letter to Prime Minister Narendra Modi through, requesting to withdraw Finance ministry’s decision that requires the state to repay the viability gap funding (VGF) for the Vizhinjam International Seaport project.
He highlighted that the Centre’s position contradicts standard VGF guidelines, which define it as a non-repayable, single-instance grant.
“As the Rs 817.80 crore provided by Government of India is to be repaid on Net Present Value (NPV) basis, this would result in repayment of Rs 10,000 to 12,000 crore from the State Exchequer in actual terms, computed on projected interest rates and revenue realization from the port over the period of repayment,” Vijayan wrote in his letter dated December 10.
“If the payback is insisted by the Government of India, the assistance provided would not be a capital grant but would be a loan. This clearly is contrary to the very intent of the scheme,” he added.
The CM also highlighted states substantial investment of Rs 5,554 crore in the project, while requesting the withdrawal of VGF repayment requirement.
“Considering the major investment made by the State (Rs. 5,554 crore) and the returns accruing (including savings on foreign exchange) to the nation as a whole, it is only just and fair that the decision requiring repayment of Rs. 817.80 crore provided by Gol as VGF in NPV terms is withdrawn at the earliest,” the letter mentioned.
Earlier in November, CM Vijayan had written with finance minister Nirmala Sitharaman, seeking assistance for the release of the Centre’s VGF share without repayment conditions.
The Union Cabinet in June sanctioned the VGF scheme for offshore wind energy developments.
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