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Last week, Kerala and Adani Vizhinjam Port Pvt Ltd signed a supplementary concession agreement, accelerating the revenue-sharing timeline for the Vizhinjam deep-water port. The expanded capacity will allow the port to handle 4.5 million containers annually, with revenue projections rising from INR 54,750 crore to INR 215,000 crore over 36 years. Kerala's share of revenue will also increase, while indirect revenue through GST and corporate taxes is expected to rise significantly. The agreement reduces the state's financial obligations and ensures an earlier start to revenue.
Last week, Kerala signed a supplementary concession agreement with Adani Vizhinjam Port Pvt Ltd, advancing the revenue generation timeline for the Vizhinjam deep-water international seaport near Thiruvananthapuram. The INR 7,700 crore port, developed as a public-private partnership with the Adani Group, is now expected to be fully operational by December 2028. Advertisement
The new agreement stipulates that with the expanded capacity to 4.5 million containers per year, up from the original 1 million, the total revenue projection for the port will rise significantly-from INR 54,750 crore to INR 215,000 crore over the 36-year operational period. Kerala's share of the revenue will also see a substantial increase, from INR 6,300 crore to INR 35,000 crore. Minister for Ports, VN Vasavan, explained that under the revised terms, the state will start receiving its revenue share as initially planned in 2034, rather than the delayed 2039, which was previously anticipated due to construction delays.
The updated deal also expands the revenue-sharing framework. Initially, Kerala was entitled to profits only from the port's first phase. Under the new agreement, Adani Ports will now share profits from all four phases, starting in 2034. Kerala's indirect revenue, including GST income from port operations, is expected to total INR 29,000 crore over the duration of the contract. Furthermore, corporate income tax revenue is anticipated to rise. These adjustments will result in an additional INR 48,000 crore in revenue, factoring in both the state's share and GST over 36 years.
With the expanded capacity, Vizhinjam port is set to become southern India's largest freight terminal. The revised deal also reduces Kerala's financial commitments during the construction phase, lowering its viability gap funding obligation to Adani Ports from INR 408.90 crore to INR 365.10 crore.
The revised deal ensures earlier-than-expected revenue for Kerala, with the port's expanded capacity set to make it southern India's largest freight terminal. The deal enhances financial viability while facilitating growth in the region's economic landscape, securing significant revenue for Kerala over the next three decades.
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