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Chennai port to takeover Kamarajar port: circuitous method to hand it over to the private sector says a former Port Official

The Kamarajar.Port in Ennore will soon become a fully owned port of Chennai Port with the shipping ministry deciding to divest its 67 per cent stakes in favor of Chennai port.

At present the shipping ministry held 67 per cent and Chennai port 33 per cent of the shares of the Kamarajar port, situated about ten kilometers north of Chennai.

When the decision to disinvest Kamarajar port was taken two years ago, speculations were rife that a Gujarat based shipping magnate may take over the port.  Adani has a container terminal at Kamarajar port and owns a private port Katupalli about a few kilometers away from Kamarajar port.

Commenting on the latest development, a former official of the Kamarajar port said the move to hand over Kamarajar Port to Chennai was taken when government is aware that the arrangement would not work. When the performance of Kamarajar port under the new arrangement takes beating, the port may be handed over to the private sector citing malfunctioning. The official pointed out that government also realized that it may not be politically wise in Tamil Nadu to hand over a port named after late Kamaraj to the private sector,

Meanwhile the Department of Investment and Public Asset Management (DIPAM), of the Union Finance Ministry, has commenced the process of strategic disinvestment of Kamarajar Port Ltd (KPL). In this connection, bids have been invited to appoint a legal advisor. This would be one of the biggest strategic disinvestment deals, reports said.

 The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, had on February 28 given ‘in principle’ approval for strategic disinvestment of 100 per cent equity shares of the government of India in KPL to Chennai Port Trust in a single stage process by following ‘Arm’s length’ principles. Presently, the government and Chennai Port Trust hold 67 per cent and 33 per cent of shares, respectively, in KPL.   

As per the request for proposal, DIPAM intends to appoint a transaction advisor for strategic disinvestment of KPL, and bids from reputed domestic law firms with minimum experience of five years and expertise in mergers and acquisitions/takeovers/strategic disinvestment are invited to act as legal advisor and assist the government in the process. 

The proposals are to be submitted in sealed envelopes before 3 pm on April 29 and "the government would reserve the sole right to accept or reject any or all proposals thus received without assigning any reasons thereof". 

 

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