Published On:October 24 2017
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After green nod, APSEZ set to formalise Kattupalli port deal with L&T arm.
Decks have been cleared for Adani Ports and Special Economic Zone Ltd. (APSEZ) to formally acquire Kattupalli port near Chennai from L&T Shipbuilding Ltd (LTSB) after a government agency cleared the bifurcation of the environment and coastal regulation zone (CRZ) clearances granted to the shipyard-cum-port complex.
On October 13, the Expert Appraisal Committee (EAC), functioning under the Ministry of Environment, Forest and Climate Change, approved an application filed by LTSB to amend the green clearance — issued earlier to LTSB — and to split it between LTSB and Marine Infrastructure Developer Pvt Ltd (MIDPL), a separate company formed by LTSB to vest the port business at Kattupalli, an official briefed on the EAC decision said.
This was the last of the statutory and regulatory clearances required to formalise the deal which was first announced in November 2015. Pending approvals, APSEZ has started running the de-merged Kattupalli port as an “official operator”.
In March 2016, the Tamil Nadu government approved the de-merger of the port from the shipyard to facilitate the deal between APSEZ and L&T Shipbuilding,
L&T Shipbuilding is 97 per cent owned by Larsen & Toubro Ltd (L&T), with Tamil Nadu Industrial Development Corporation (TIDCO) holding the balance stake. The Kattupalli shipyard and port was awarded to L&T in 2008 for development and operations for 30 years by the Tamil Nadu government as a so-called captive port — a facility developed by an entity for handling its own (captive) cargo.
To facilitate optimum utilisation of port infrastructure, the Tamil Nadu government later permitted L&T to handle other commercial cargo such as containers and cars at the captive facility, in line with its port development policy.The port policy of Tamil Nadu under which the original deal was awarded to L&T does not permit the sale of the port alone because it was structured as a single entity – L&T Shipbuilding Ltd. Hence, the sale, needed clearance from the State government to hive-off the port from the shipyard.
In March this year, the National Company Law Tribunal (NCLT) approved a scheme of arrangement for de-merger of the port business of LTSB into a separate company- MIDPL.
Formalities for the acquisition of Kattupalli port, is in the final stages. APSEZ has paid ₹1,450 crore till March 2017 for the acquisition which will be completed soon, according to the company. The firm achieved over 500 per cent growth as the official operator of Kattupalli, with container volumes rising from 7,900 TEUs a month in November 2015 (when the deal was announced) to over 35,000 TEUs per month in FY17.
APSEZ plans to transform Kattupalli into a multi-commodity port with a capacity to handle 24.65 million tonnes (mt) of cargo including 1.8 million TEUs, 149,899 automobiles, 0.44 mt of project cargo, 1.82 mt of break bulk/general cargo and 0.57 mt of edible oil, base oil, lube oil and non-hazardous liquid cargo.