Adani to sell 49% stake in Vizhinjam port to international company, Kerala says not informed
The Kerala government has said it has not been officially informed about Adani Ports' decision to sell 49 per cent stake in Vizhinjam International Seaport Ltd to Switzerland-based Mediterranean Shipping Company (MSC)’s terminal arm, Terminal Investment Limited (TiL). They also made it clear that no change in ownership can take place without the state's approval.Terminal Investment Limited (TiL), is set to acquire a 49% stake in Adani Vizhinjam Port Private Limited (AVPPL), the company operating the Vizhinjam International Seaport, for USD 1.397 billion (around Rs 12,000 crore).The deal, announced on June 30, Tuesday, is being described by the company as the largest foreign private investment in India's port infrastructure. The transaction is subject to regulatory approvals.Responding to the concerns raised by Opposition Leader Pinarayi Vijayan in the Assembly on July1, Wednesday, Chief Minister VD Satheesan said the government came to know about the proposed transaction only through newspaper reports."Adani Ports has not sent any letter or officially informed the government about the proposed transaction," the Chief Minister said.Referring to the concessionaire agreement, he said, "Clause 5.3 of the agreement clearly states that the concessionaire shall not undertake any change in ownership without the prior approval of the authority. In this case, the authority is the Government of Kerala. The agreement also specifies that the sale of more than 25 per cent of the stake constitutes a change in ownership. Therefore, they cannot effect an ownership change without the Kerala government's approval," Satheesan said.The Vizhinjam International Seaport Project is being developed under a Public Private Partnership (PPP) model between the Government of Kerala (GoK) and Adani Vizhinjam Port Private Limited (AVPPL) on a design, build, finance, operate and transfer (DBFOT) basis.The first phase of the project saw an investment of around ₹8,867 crore, with the Kerala government chipping in around ₹5,600 crore and the Adani Ports contributing roughly ₹2,500 crore."They have not approached us so far. When they do, we will examine the proposal. We will also take into consideration the concerns raised by the Leader of the Opposition," he said.Earlier, raising the issue in the Assembly, Opposition Leader Pinarayi Vijayan questioned the implications of allowing MSC, the world's largest container shipping company, to acquire a major stake in the port, warning that it could create a monopoly and undermine competition."The concern is that MSC is a shipping company. Whenever a project of this scale is undertaken, national security and public interest must be safeguarded. Following the Pahalgam attack and Operation Sindoor, the Union government classified Vizhinjam Port as highly critical infrastructure," Pinarayi Vijayan said.He argued that the partnership between Adani Ports and MSC would concentrate control over cargo movement. "When MSC collaborates with Adani, it effectively creates a monopoly. Exporters from Kerala will be able to ship their goods only through the cargo services of a single company. As a result, entrepreneurs will have no choice but to accept the freight rates fixed by that company," he alleged.The Opposition Leader also said the development would affect the prospects of public sector entities and other operators. "We had earlier signed MoUs with several public sector establishments, but with this monopoly taking shape at Vizhinjam, none of them will have any scope for growth. Such a monopoly destroys market competition and will seriously affect the development of Kerala's ports," he added.The Chief Minister said the government shares the concerns over national security and competition. "There are national security concerns. That means, apart from the state government's approval, the Union government's approval will also be required. Another major concern is public interest. The government must ensure that no monopoly is created. There should be a common-user facility at the port. It should not become the monopoly of a single company," he said.He added that the government would balance these concerns with the port's development. "Along with addressing these concerns, we will also ensure fair competition, promote investments and support the development of Vizhinjam Port," the Chief Minister said. The port currently has a handling capacity of 1.6 million TEUs, with work underway to increase this to 5.7 million TEUs by 2028.A statement from Adani Ports said the partnership is expected to increase cargo volumes and strengthen Vizhinjam's role as a transshipment hub in the Indian Ocean. The company also said the collaboration would bring additional cargo from Bangladesh, East African trade routes and relay traffic.The agreement marks the third collaboration between Adani Ports and MSC after their joint ventures at Mundra and Ennore ports.
THE Kerala government has said it has not been officially informed about Adani Ports' decision to sell 49 per cent stake in Vizhinjam International Seaport Ltd to Switzerland-based Mediterranean Shipping Company (MSC)’s terminal arm, Terminal Investment Limited (TiL).
They also made it clear that no change in ownership can take place without the state's approval.
Terminal Investment Limited (TiL), is set to acquire a 49% stake in Adani Vizhinjam Port Private Limited (AVPPL), the company operating the Vizhinjam International Seaport, for USD 1.397 billion (around Rs 12,000 crore).
The deal, announced on June 30, Tuesday, is being described by the company as the largest foreign private investment in India's port infrastructure. The transaction is subject to regulatory approvals.
Responding to the concerns raised by Opposition Leader Pinarayi Vijayan in the Assembly on July 1, Wednesday, Chief Minister VD Satheesan said the government came to know about the proposed transaction only through newspaper reports.
"Adani Ports has not sent any letter or officially informed the government about the proposed transaction," the Chief Minister said.
Referring to the concessionaire agreement, he said, "Clause 5.3 of the agreement clearly states that the concessionaire shall not undertake any change in ownership without the prior approval of the authority. In this case, the authority is the Government of Kerala. The agreement also specifies that the sale of more than 25 per cent of the stake constitutes a change in ownership. Therefore, they cannot effect an ownership change without the Kerala government's approval," Satheesan said.
The Vizhinjam International Seaport Project is being developed under a Public Private Partnership (PPP) model between the Government of Kerala (GoK) and Adani Vizhinjam Port Private Limited (AVPPL) on a design, build, finance, operate and transfer (DBFOT) basis.
The first phase of the project saw an investment of around ₹8,867 crore, with the Kerala government chipping in around ₹5,600 crore and the Adani Ports contributing roughly ₹2,500 crore.
"They have not approached us so far. When they do, we will examine the proposal. We will also take into consideration the concerns raised by the Leader of the Opposition," he said.
Earlier, raising the issue in the Assembly, Opposition Leader Pinarayi Vijayan questioned the implications of allowing MSC, the world's largest container shipping company, to acquire a major stake in the port, warning that it could create a monopoly and undermine competition.
"The concern is that MSC is a shipping company. Whenever a project of this scale is undertaken, national security and public interest must be safeguarded. Following the Pahalgam attack and Operation Sindoor, the Union government classified Vizhinjam Port as highly critical infrastructure," Pinarayi Vijayan said.
He argued that the partnership between Adani Ports and MSC would concentrate control over cargo movement. "When MSC collaborates with Adani, it effectively creates a monopoly. Exporters from Kerala will be able to ship their goods only through the cargo services of a single company. As a result, entrepreneurs will have no choice but to accept the freight rates fixed by that company," he alleged.
The Opposition Leader also said the development would affect the prospects of public sector entities and other operators. "We had earlier signed MoUs with several public sector establishments, but with this monopoly taking shape at Vizhinjam, none of them will have any scope for growth. Such a monopoly destroys market competition and will seriously affect the development of Kerala's ports," he added.
The Chief Minister said the government shares the concerns over national security and competition. "There are national security concerns. That means, apart from the state government's approval, the Union government's approval will also be required. Another major concern is public interest. The government must ensure that no monopoly is created. There should be a common-user facility at the port. It should not become the monopoly of a single company," he said.
He added that the government would balance these concerns with the port's development. "Along with addressing these concerns, we will also ensure fair competition, promote investments and support the development of Vizhinjam Port," the Chief Minister said.
The port currently has a handling capacity of 1.6 million TEUs, with work underway to increase this to 5.7 million TEUs by 2028.
A statement from Adani Ports said the partnership is expected to increase cargo volumes and strengthen Vizhinjam's role as a transhipment hub in the Indian Ocean. The company also said the collaboration would bring additional cargo from Bangladesh, East African trade routes and relay traffic.
The agreement marks the third collaboration between Adani Ports and MSC after their joint ventures at Mundra and Ennore ports.
