Kerala govt., Adani Group strive to resolve differences over sale of Vizhinjam port stake
The Kerala government and the Adani Group are striving to mend fences after the former conveyed its strong displeasure to the company over being kept
The Kerala government and the Adani Group are striving to mend fences after the former conveyed its strong displeasure to the company over being kept in the dark regarding the proposed stake sale in the Adani Vizhinjam Port Private Limited (AVPPL). As part of the effort, Aswani Gupta, CEO of Adani Ports and Special Economic Zone (APSEZ), has said that the company wants to take the Vizhinjam port to the next level only with the support of the Kerala government, along with the backing of the Union government. Allaying fears of a monopoly by a shipping line, Mr. Gupta said that partnering with the Switzerland-based Mediterranean Shipping Company (MSC) does not mean that it will have exclusivity at the port.
The port is, and will continue to be, open to all partners from around the world to bring in new business, in line with the concession agreement. He also added that signing the binding agreement with MSC is only the beginning of a process, and that all approvals, including those from the Competition Commission of India (CCI) and the Kerala government, must be obtained before the stake transfer can be completed. The State is also exploring the possibility of placing conditions on the stake sale as part of protecting the interests of the State, either by entering into an agreement similar to the one it signed with the APSEZ while settling the arbitration proceedings after the company missed the project’s 2019 deadline, or by incorporating new conditions into the existing agreement.
Legal advice sought An empowered committee headed by the Chief Secretary is examining the detailed letter submitted by the Adani Group regarding the stake sale. In addition, the State has reportedly sought legal advice from the Advocate General. The APSEZ had gone ahead with its decision to divest 49% stake in AVPPL — the concessionaire and operating company of the Vizhinjam International Seaport in Kerala — to the MSC without informing the State government. This was despite the concession agreement stipulating that the concessionaire shall not permit any change in ownership without the prior approval of the State government.
According to the announcement made by the Adani Group, MSC will acquire a 49% stake in the Vizhinjam port company for $1.397 billion (around ₹13,220 crore). MSC will make the investment through its container terminal operating and investment arm, TiL.
The BriefWire