MSC-Adani Vizhinjam port deal: Kerala CM says State’s consent mandatory for change of ownership

KErala chief government minister VD Satheesan on midweek said Adani Ports and Special economical district (APSEZ) Ltd has non obtained the State government’s consent to sell a 49% stake in Adani Vizhinjam Port Private Ltd (AVPPL) to Mediterranean Shipping Company (MSC), and that the government would examine issues such as national security, public interest and fair competition before granting approval.The chief 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 foreign private investment in an Indian port.“The State has not received any correspondence from Adani Ports on this transaction. In the concessionaire agreement, as per clause 5(3), ‘The Concessionaire shall not undertake or permit any change in ownership, except with the prior approval of the Authority.’ The authority is Government of Kerala. Without our consent, they cannot effect any change in ownership,” the chief minister said in the assembly.He underlined that there were concerns regarding the proposed sale of a stake in the port to the world’s largest container shipping company.“First of all, in terms of national security, there is strategic importance (of the port). From a national security angle, the approvals of the Union Home Ministry and Union Shipping Ministry 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 facility centre for all users without discrimination,” he said.The chief minister said MSC was not just an investor but the world’s largest company handling maritime cargo movements. He said the State government would examine five aspects while considering the proposed investment — national security, public interest, fair competition, investment promotion and the port’s long-term development potential.The Vizhinjam port, the country’s first dedicated transshipment port, was commissioned by Prime Minister Narendra Modi in May last year. It is operated under a public-private partnership (PPP) model, with APSEZ as the concessionaire under a 40-year build-operate-transfer agreement with the Kerala government.Under the concession agreement, APSEZ can sell its stake in AVPPL to a third party, but the transaction is subject to regulatory approvals and the consent of the Kerala government.