The Kerala government has referred Adani Ports' proposal to transfer a 49% stake in the Vizhinjam port project to Mediterranean Shipping Company (MSC) to an Empowered Committee for detailed examination. This move comes a week after Adani Ports announced a significant $1.4-billion deal with the global shipping giant.
Committee to Scrutinize Agreement and State Interests
The state cabinet, led by Chief Minister V. D. Satheesan, decided to send the proposed transaction to an Empowered Committee headed by the Chief Secretary. The committee's mandate includes a thorough review of the existing concession agreement, an assessment of Kerala's interests in the deal, and an examination of all legal aspects surrounding the proposed stake transfer. The cabinet will make a final decision only after considering the committee's recommendations, with the Chief Minister asserting that no action against Kerala's interests will be taken.
Prior Approval and Transaction Status
Initially, Chief Minister Satheesan had stated in the Assembly that the government had not been officially informed of the transaction. He later clarified that while discussions might have occurred, the formal request for prior approval, which is mandatory under the concession agreement for any share transfer exceeding 25%, was only recently received. Satheesan firmly refuted media reports suggesting the transaction had already been completed, emphasizing that "No share transfer has taken place." He highlighted Clause 5.3 of the agreement, which necessitates the state government's prior approval for such significant share transfers.
Addressing Monopoly Concerns and Past Discussions
The Chief Minister also addressed criticisms regarding the potential for a monopoly, particularly from opposition leader Pinarayi Vijayan. Satheesan countered that Clause 5.8.1 of the concession agreement explicitly ensures the port remains a common-user facility, granting the government power to intervene to prevent any single company from establishing a monopoly over operations. Furthermore, Satheesan alleged that discussions between Adani Ports and MSC had been ongoing for nearly a year and that the previous Left government was aware of these talks, citing reports from the CPI(M) mouthpiece and MSC representatives attending a Vizhinjam Conclave in 2025.