The mega port planned at Vadhavan in Maharashtra’s Palghar district is facing a last minute ‘structuring’ challenge with the Prime Minister’s Office (PMO) floating an idea to adopt the Hybrid Annuity Model (HAM) – widely used in highways – to implement the Rs.762 billion project.
If the HAM model is approved, it will be the first for a port project, necessitating a large-scale restructuring of the Vadhavan project parameters.
Port industry sources are sceptical of adopting the HAM model for port contracts, citing challenges associated with cargo handling activities and collection of vessel related and cargo-related charges from the users of the facility. Cabinet approval will now have to wait till clarity emerges on the model to be adopted for constructing the new port and after a new government assumes office in June. The ‘last minute suggestion’ from the PMO has stalled Cabinet clearance for the project which was expected before the dates for the ensuing Lok Sabha polls were announced by the Election Commission.