Kochi: The various agreements entered as part of the Vizhinjam port development project with the Adani Group are not that of safeguarding the interest of the state, the Vizhinjam Judicial Commission observed at its sitting on Tuesday.
Chairing the commission, Justice C N Ramachandran observed that the UDF government had failed to safeguard the interest of the state while entering into various agreements with the Adani Group.
While hearing from former Port Secretary James Varghese, the commission came across a mortgage agreement signed between the company and the government, and found it very unusual. The commission questioned why the government should permit a private company to mortgage government land when the project is funded by the government itself.
The commission also questioned the allotment of 30 per cent of the land to a private company for developing a commercial establishment. It asked whether the company could use this land for real estate purpose.
On the mortgage of land agreement, the counsel appearing for the Adani Group submitted that was done to avail loan from banks. The Adani Group also stated no land reserved for the port project has been mortgaged till now. On this, the commission asked why the government could not add a clause in the agreement preventing the private company from mortgaging the land.
Another point of debate was about the ‘Basic Engineer Cost’ report prepared by AECOM, an international company. In 2013, AECOM filed a report estimating the basic engineering cost at around Rs 631 crores.
The same company filed another report in 2015 in which the cost was hiked to Rs 934 crores.
In the CAG report, it was claimed an inflation of 5 percent can take place annually, but a 50 per cent hiked cost was highly unusual. On this, the commission asked the government pleader to produce both the reports by AECOM and find why such a hike was reported. The commission will continue its sitting on Wednesday.