Adani will have to pay damages

 thehindu.com  12/04/2019 18:22:48 

With the Adani Group missing the December 2019 deadline to commission Phase I of the International Multipurpose Deepwater Seaport project at Vizhinjam and the chances of completion in the first three months of the cure period bleak, the State will seek damages for failing to meet the deadline.

The State can seek 0.1% of the performance guarantee of 120 crore deposited by Adani Vizhinjam Ports Ltd (AVPL) to the exchequer after the initial three months of the nine-month cure period for failing to meet the deadline, as per the concession agreement. The damages to be paid to the exchequer will come to 12 lakh daily and 3.60 crore monthly.

The government will have to take a call on when to collect the damages, duration, daily or monthly, and it will have to get the mandatory approval of the Independent Engineer.

Notice will be given to the AVPL once it is decided, official sources associated with the project told The Hindu on Wednesday.

The provision of seeking damages has come up for debate as the four-year/1,460-day deadline from December 1, 2015, fixed in the pact inked between the State and the AVPL, the multi-port operator tasked with the execution of the ambitious project, ended on Wednesday.

Only 20% of the 3.1-km-long breakwater and 40% of dredging and reclamation has been completed till date since works began in December 2015. The delay is owing to the breakwater. It is unlikely that the AVPL will complete Phase I even during the nine-month cure period that has commenced, sources said.

No extension sought

The AVPL has not given anything in writing to Vizhinjam International Seaport Ltd. (VISL) and the government on the completion of Phase I nor has it sought any extension till date, the official said.

In PPP projects, there is no room for granting extension.

The AVPL need not pay damages in the first three months of the cure period. Termination is the last resort for the government, the official said.

The dredging and works of construction of the breakwater were badly hit by Cyclone Ockhi in November 2017, the southwest monsoon of 2018, and shortage and inability to procure the needed rocks.

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