Chief Minister V D Satheesan on Wednesday told the Assembly that the State Government had no formal intimation about Mediterranean Shipping Company (MSC) Group's terminal arm, Terminal Investment Limited's (TiL) move to secure 49 per cent stake in Adani Vizhinjam Port Private Limited (AVPPL), the concessionaire for Vizhinjam port.  

"We came to know of this only through newspaper reports. The Adani Group has not informed us of the reported deal," the Chief Minister told the Assembly while replying to a Submission moved by Opposition Leader Pinarayi Vijayan.

He said that Clause 5(3) of the Vizhinjam  concessionaire agreement clearly stated that the concessionaire (AVVPL) should not undertake or permit any change in ownership without the prior approval of the Kerala government. 

Further, the CM said that according to the Companies Act the sale of 25 per cent of a company's equity was enough to call it a change of ownership. "Ownership change cannot be done without the approval of the Kerala government," the CM said, and added: "We will examine it when the proposal comes before us."

Adani Ports had said on June 30 that TiL would invest approximately Rs 132.28 billion (Rs 13,328 crore) to acquire 49 per cent of AVVPL's stake.

Former Chief Minister Pinarayi Vijayan, while making his Submission, said that the Adani-MSC deal could precipitate a monopoly. "A situation could develop where industries and businesses will have to depend on just one shipping company for the transport of their cargo. Businesses will have to agree to their monopoly rates," Pinarayi said. 

He said that Kerala had already signed MoUs with public sector units like Indian Oil Corporation Limited (IOCL), Container Corporation of India (CONCOR), and Central Warehousing Corporation (CWC) for logistics and container freight. "The growth possibilities of such companies could end," Pinarayi said, and added: "Competition is a prerequisite for growth."

The former Chief Minister had yet another concern. "When a monopoly emerges, isn't there a possibility that Kerala's share of the profits from port operations will be artificially kept low," Pinarayi said.

Satheesan seemed to consider the fear of losing profits to the scheming of Adani and MSC as highly exaggerated. However, the CM said that the government would be alert to emergence of a monopoly. "A competitive common user facility should be established in Vizhinjam Port. It is the responsibility of the state government to thwart a monopoly," he said.

He said that all stakeholders, like shipping lines, vessel operators, shippers, consignees and freight forwarders, should be able to use the port without facing discrimination. 

The CM said the government would be sensitive to five things. One, national security. Two, public interest. Three, fair competition. Four, non-discriminatory investment prospects. Five, Vizhinjam port's future expansion.

"The government would approve of the deal (Adani-MSC) only after evaluating these five factors," the CM said.