Adani Group to Take Over L&T’s Kattupalli Terminal by September?
Port Wings News Network:
Adani Group, headed by Mr Gautam Adani and one of India’s leading business houses with revenue of over $10 billion, is all set to take over the Kattupalli International Container Terminal (KICT), promoted by engineering major Larsen & Toubro at Kattupalli Port in Tamil Nadu, it is reliably learnt.
In what could be an early indication of possible takeover of the terminal, said to be from the first week of September this year, officials of Adani Group and KICT have jointly organized a trade meet with the prominent seafood exporters in the region in Chennai on July 24 and sought the trade’s support.
Speaking to Port Wings, one of the exporters (who attended the trade meet), seeking anonymity said that they (Adani Group) were very eager to ascertain the potential of seafood trade from the region and also gave assurance to the trade that they can walk an extra mile to ensure hassle-free exports from Kattupalli.
The news of possible takeover could not be verified from either side, as they were reluctant to share any information pertaining to the development citing different reasons.
STAKEHOLDERS OF KATTUPALLI PORT:
Kattupalli Port is promoted by L&T Ports, a division of L&T Shipbuilding Limited, a joint venture company formed by Larsen & Toubro Limited and Government of Tamil Nadu’s trade arm Tamil Nadu Industrial Development Corporation Limited (TIDCO). While the L&T holds 97 % in the shipyard cum port complex project, Tamil Nadu Government (through TIDCO) holds 3 % share.
RUMOURS GAINING GROUND:
Though rumours of Adani Group taking over the Kattupalli Container Terminal were flying for the past few weeks, no one from both the listed companies gave any concrete information about it in the public domain.
However, developments like a joint trade meet by Adani Group and L&T few days ago has clearly hinted that there are some concrete developments happening behind the scene on the possible taking over of the terminal.
ADVANTAGE FOR ADANI:
For Adani Group, which wants to strengthen its presence in the East Coast, the possible taking over of L&T’s container terminal, located within a few kilometers distance from its own project, a container terminal (now in construction phase) at Kamarajar Port (erstwhile Ennore Port), could help to secure calling of vessels (mainline, feeder and coastal) from the day one of its operation.
Besides, maritime analysts suggest that it could further help the Adani Group to project both the terminals as a largest hub for containers in East Coast.
Furthermore, sources monitoring the growing port landscape in the country clearly pointed out that the Adani Group plans to project both the terminals as “Mundra of East Coast.”
It may be noted that Adani Group recently got the Vizhinjam port project in Kerala and in 2014, Adanis acquired Dhamra Port in Odisha from Tata Steel and L&T for an estimated Rs 5,500 crore.
ADVANTAGE FOR L&T:
According to sources, the possible handing over of Kattupalli Container Terminal to Adani by September would also augur well for the L&T management, which intends to focus more on defence projects at its shipyard located in the Kattupalli port complex.
Even though the managements of Adani and L&T may have discussed about the critical points involved in the possible take over from the legal point of view, experts feel that the “transition” may not be that easy. The Tamil Nadu Government roped in the L&T to develop the port complex and initially there were no reference about operation of container terminal.
Besides, it is not clear, whether the L&T management handover “absolute right” on container terminal to Adani Group. If the L&T management intends to give to total control, then it needs the concurrence of the Tamil Nadu Government, another stakeholder in the port project.