Kerala Chief Minister Pinarayi Vijayan criticised the Centre for imposing repayment conditions on the Viability Gap Fund (VGF) for the Vizhinjam Port, which is typically treated as a grant. Vijayan warned that the repayment could cost Kerala Rs 10,000-12,000 crore and called for fair treatment.
Kerala Chief Minister Pinarayi Vijayan has accused the Union Government of adopting a vindictive stance towards the state by demanding to impose repayment conditions on the Viability Gap Fund (VGF) allocated for the Vizhinjam Seaport project.
Vijayan criticised the Centre’s decision, stating that it deviates from the established policy of treating VGF as a one-time grant, not a loan.
Addressing the media on Monday, Vijayan revealed that Union Finance Minister Nirmala Sitharaman, in a letter, reaffirmed the Centre’s condition that the Rs 817.80 crore allocated to the project should be repaid. The Chief Minister pointed out that such stipulations were not imposed on similar projects, including the Kochi Metro and the Tuticorin Outer Harbour Project.
The Kerala government has expressed concerns over the financial burden this decision could place on the state. Vijayan highlighted that repayment, along with interest, could escalate the total amount to Rs 10,000-12,000 crore, despite the Centre earning significant GST revenue from the port’s operations.
Vijayan called on the Centre to treat Kerala fairly, seeking the same terms as other projects that received VGF assistance without repayment conditions. The state government has contributed Rs 4,777.14 crore for the construction of the port and its infrastructure, and it believes it should receive a larger share of the profits from the port in return.
In November, Vijayan had written to Union Finance Minister Nirmala Sitharaman to remove the financial condition imposed on the VGF for the Vizhinjam International Seaport project.
