Thiruvananthapuram, July 20 (IANS): The Kerala government will sign on August 17 an agreement with Adani Ports for building the Vizhinjam Port, a state minister said on Monday.

The date was fixed after a team of Adani Ports officials led by executive director Karan Adani held talks with a Kerala team led by Chief Minister Oommen Chandy, Ports Minister K. Babu told reporters at the assembly complex here.

"The agreement will be inked on August 17 in the presence of Adani Ports chairman Gautam Adani. Work on the port will begin on November 1, which is Kerala's Formation Day," said Babu.

Ahead of signing the agreement, Adani Ports will have to float a special purpose vehicle company for the port's construction and deposit Rs.125 crore with the Kerala government as security deposit.

The Kerala government last week handed over an offer letter to Adani Ports, the lone bidders, to build the port. Adani Ports had sought Rs.1,635 crore as grant for the project.

The Rs.4,000-crore first phase will come up near famous tourist destination of Kovalam.

"Ten percent more land needs to be acquired for the project. We expect to complete this at the earliest. We assured Adani officials on their demand for uninterrupted limestone supply from state quarries that it would be done as per the rules. They also asked for cabotage relaxation for the port," the minister added.

Chandy told the Adani officials that the cabotage issue was raised with Prime Minister Narendra Modi on a few occasions and that he would write to him again on Monday.

Cabotage refers to transport of goods or passengers between two places in the same country by a transport operator from another country.

Adanis are building eight ports in the country. As against four years given to finish the first phase of the Vizhinjam port, the company expected to finish it in two years," Karan Adani told Chandy.

Denying former shipping secretary K. Mohandas' claim that the Vizhinjam Port might not be viable, Adani Ports director U. Rao said all viability aspects were looked into before bidding for the port.

"We have no doubts about the project's viability at all," Rao told reporters after his meeting with Chandy.