Shortcut from east to west coast gets nod

Post-tsunami, the project landed in new trouble when the PMO raised queries on the environment impact assessment study by National Environmental Engineering Research Institute (NEERI).

The PMO wanted fresh evaluation as information about the effects of tsunamis and cyclones on the project had not been factored in and noted there were huge gaps in the current knowledge about sedimentation.

Subsequently, a team of experts studied the project and made it clear that the Gulf of Mannar would not face any threat from the tsunami in future. Other than the legal and environmental tangles, the project has had politicians vying with each other to take credit for its sanction. And the Cabinet okay today has already led to talk that it will become a poll issue when the state elects its new Assembly.

In New Delhi, Finance Minister P Chidambaram said the SSCP would vastly reduce distance between the east and west coasts. Comparing its benefits with that of Suez and Panama Canals, he said: ‘‘It opens up a channel that will enable ships to avoid going around Sri Lanka.’’

Calling it ‘‘a dream for over 100 years,’’ he said the government had fulfilled one of the major promises made in the CMP and budget.

Chidambaram said a Special Purpose Vehicle (SPV) would be set up for implementation of the project and raising funds. They may tap the market through an IPO or private placements to mobilise Rs 226 crore. In addition, the Centre, Port Trust, SCI, Dredging Corporation and others will contribute to the funding.

According to Chidambaram, the project had ‘‘tremendous externalities’’ in defence, security and anti-smuggling operations.

—(With ENS from New Delhi)