Kerala Chief Minister V D Sathisan on Wednesday said Adani Ports and Special Economic Zone (APSEZ) Ltd has not received the state government’s approval to sell 49% stake in Adani Vizhinjam Port Private Ltd (AVPPL) to Mediterranean Shipping Corporation (MSC), and that the government will consider issues like national security, public interest and fair competition before giving approval.
The Prime Minister made the remarks on the floor of the State Assembly during Question Hour, a day after APSEZ announced that Terminal Investment Ltd (TiL), the container terminal arm of MSC, would invest $1.397 billion in the port concessionaire and acquire a 49% stake. The deal was described as the largest private foreign investment in an Indian port.
“The state has not received any correspondence from Adani Ports regarding this transaction. In the concessionaire agreement, as per Clause 5(3), ‘the concessionaire shall not make or permit any change in ownership, except with the prior approval of the authority.’ The authority is the government of Kerala. Without our approval, they cannot effect any change in ownership,” the chief minister said in the assembly.
He stressed that there are concerns about the proposed sale of a stake in the port to the largest container shipping company in the world.
“First of all, in terms of national security, there is strategic importance (of the port). From the angle of national security, the approvals of the Federal Home Ministry and the Federal Ministry of Shipping are required. Secondly, public interest is very important. There should be a common user facility here. Under no circumstances should this company have a monopoly there. (The port) should become a common user center for all users without discrimination,” he said.
The Prime Minister said that MSC is not just an investor but is the largest company in the world dealing with maritime freight traffic. He said the state government would consider five aspects while considering the proposed investment – national security, public interest, fair competition, investment promotion and long-term development potential of the port.
Vizhinjam Port, the country’s first dedicated trans-shipment port, was established by Prime Minister Narendra Modi in May last year. It is operated under a public-private partnership (PPP) model, with APSEZ being the concessionaire under a 40-year build, operate and transfer agreement with the Kerala government.
Under the concession agreement, APSEZ can sell its stake in AVPPL to a third party, but the deal is subject to regulatory and Kerala government approvals.
