Lanco Infratech secures LI for Vizhinjam Port project

Hyderabad: Lanco Infratech has secured a letter of intent (LI) from the Kerala Government for development of the Rs 8,300 crore Vizhinjam International Transhipment Terminal Port project.

The project awarded to the Lanco consortium includes Pembinan Redzai Bhd of Malaysia. The Union Government formally granted the security clearance earlier this month.

The Minister for Ports, Kerala Government, Mr M. Vijaykumar, handed over a letter of intent to the Chairman of Lanco Infratech, Mr L. Madhusudhan Rao, according to a company statement.

According to plans, the licence agreement for the project will be signed within 6 weeks between the Kerala Government and a special purpose company to be incorporated by the Lanco consortium for the project.

The Kerala Government will have 24 per cent equity stake in the company, with the rest to wrest with the consortium partners.

The project mandate is to develop an international container transhipment port in four phases with an ultimate capacity of 6.5 million TEUs (twenty foot equivalent units).

According to the company, this port has the distinct advantage of being a transhipment hub given its 15-18 metres natural draft and proximity to international sea routes.

According to Lanco, work on preparation of a detailed project report is slated to commence and efforts are under way to obtain environmental and coastal regulation zone clearances.

The financial closure for the project is expected to be completed within 12-18 months and the construction activity will commence thereafter.

According to plans, the Rs 2,800-crore first phase of the port will be ready for commercial operations by 2012-end.

The port will seek to attract the container transhipment traffic from ports located in some of the countries in the region, including Colombo, Malaysia, Al-Salala and Singapore.