The Kerala government's ambitious Vizhinjam port project was recently awarded to the diversified Adani Group.
International Finance Corp (IFC) -- an arm of the World Bank Group that lends to private sector -- had taken up the advisory services project for Kerala government.
The mandate was to design and implement a bidding process for the development of the port through Kerala government's wholly-owned arm, Vizhinjam International Seaport Ltd (VISL).
"On the balance of considerations, CAO has decided to conduct a compliance investigation of IFC's E&S performance in relation to this AS (Advisory Services) project," CAO, who directly reports to the World Bank Group President, has said.
More From This Section
The "compliance investigation" would be to ascertain whether IFC breached environmental and social (E&S) assessment related norms while giving advisory services for the project.
Vizhinjam International Seaport, Special Purpose Vehicle of the Kerala government, was formed to implement the project. The estimated cost of the project is Rs 7,500 crore which also includes investments to be made by the Kerala government.
Last week, Gautam Adani-led Adani Ports and Special Economic Zone said it has received state government's nod for developing the project.
In 2012 and 2013, CAO said, it received "three complaints regarding the project from potentially affected communities. Due to the related nature of the issues raised, all three complaints are considered in this compliance appraisal."
Now, CAO would study whether IFC's advice in relation to the E&S issues was consistent with the performance standards, especially in assessing environmental and social impacts of the land-based infrastructure.
Besides, it would assess "...Whether IFC's policies, procedures and practices as applied to the selection and structuring of this AS project provided an adequate level of guidance and protection in the context of IFC's broader commitments to sustainable development.