The
centre has cleared the proposal to dredge a ship channel across
the palk straits, an idea conceived 150 years ago.
P.Sundararajan in New Delhi and N.Ravikumar in Chennai
A “100-year-dream” of the people of
Tamilnadu is poised to come true with the Indian
government approving the implementation of the sethusamudram
ship channel project off the Tamilnadu coast at a cost of
Rs.2,427.40crores.
The project cleared by the union cabinet’s committee on
economic affairs on Thursday, envisages dredging of a ship
channel across the palk straits between India
and Srilanka ..This will allow ships sailing between the
east and west
coasts of India to have a straight passage through India’s
territorial waters, instead of having to go around Srilanka- a
saving of 424 nautical miles (780km)
and upto 30hrs in sailing time.
The project also has obvious benefits from the national
security perspective: Naval and Coast guard vessels can travel
directly from east to west and vice versa much faster.
Originally proposed by a britisher, commander A.D.taylor
of the Indian marine in 1860, it was periodically dusted off the
shelves but saw no real progress till the government of India
set up the sethusamudram project committee under Sri Ramaswamy
mudaliar in1955. The committee report ,backing the project was
however put in cold
storage till it was revived again in 1999.Thursday’s announcement in that sense is the realization of an idea
conceived nearly 150 year’s ago.
A ‘special purpose vehicles’ called the sethusamudram
corporation with dept. equity ratio
of 1.5:1, will implement the project .The
central government will bear the bulk of the equity at
Rs.495crores, followed by the Tuticorin Port Trust and shipping.
Corporation of India (Rs.50crores each), and Dredging
corporation of India,Chennai Port Trust, Ennore Port limited,
Visakhapatnam Port Trust and Paradip Port Trust (Rs.30crores
each). The balance equity of the Rs.226crores would be raised
through means such as public issue , private placement and user
charges.
The Central Government will provide guarantee for the
domestic and foreign dept raised for the project and give the
corporation an interest free non-plan loan of
Rs.390.05crores.
The PSUs
and Port Trusts - the other equity partners in the project –will
provide a loan of Rs.374.75 crores in proportion to their eqity holding to
offset the negative cash flow of the corporation during the
first nine years of operation,beginning 2009-10.
The project involves dredging of 82million cubic metres,
for which global bids will be invited.
To get the project off to an early stretch of channel
involving dredging of 12 to13 million cubic metres in the palk
straits adjoining the bay of Bengal will be shortly assigned to
the dredging corporation of India. Payment to DCI will be
benchmarked to the rate of the competitive bidding.
Union Finance Minister and CCEA spokesperson ,P.Chidambaram
,pointed out that the project would fulfil a ”100-year dream”
of the people of Tamilnadu.
He said the project had been thoroughly studied by CSIR’s
National Enviroment Enigineering Research Institute (NEERI) and
it found that it would have no environmental impact.
“All apprehensions
have been addressed,” he said ..
Enviromentalists
had alleged that flora and fauna would be destroyed ,
and that the livelihood of fishing communities would be
affected by the project.
N.K.RAGHUPATHY, Chairman of sethusamudram corporation
limited , said genuine concerns of fishing community
enviromentalists had been addressed through proper design of the
channel.
He told THE HINDU, that it had been decided to spend
Rs.60 crores from the project cost on local area development.
