Vizhinjam Port: Critics point to Ennore, Vallarpadam to dismiss security concerns

THIRUVANANTHAPURAM: Allegations that the proposed stake transfer at the Vizhinjam International Seaport poses a security risk have drawn criticism, with opponents of the claim arguing that similar ownership and operating arrangements already exist at other major ports in the country.

They note that Mediterranean Shipping Company (MSC) has owned a 49% stake in Adani's Ennore Port project in Tamil Nadu for the past three years. In addition, MSC operates one of the terminals at the Ennore Port, owned by the central government, under a concession agreement that is valid until 2044. According to them, these existing arrangements have not been treated as security concerns, while a similar proposal at Vizhinjam has become the subject of controversy.

Critics also point to the Vallarpadam International Container Transhipment Terminal near Kochi, where Dubai-based DP World holds an 85% stake. The terminal is operated by India Gateway Terminal Limited, a DP World-led venture, under a 30-year agreement with the Cochin Port Authority. Although the port is owned by the Central Government, the container terminal is run by DP World. They argue that this precedent is being ignored in the debate over Vizhinjam.

The remaining three phases of Vizhinjam Port's development are scheduled to be completed by December 2028. Once the expansion is finished, the port is expected to develop into a leading international container transhipment hub on the East-West shipping corridor and a major crew change centre. The project is also expected to attract more luxury cruise vessels, giving a boost to tourism in Kerala.

The Adani Group has maintained that continued controversy over the project could affect investor confidence. It said uncertainty surrounding the port may discourage investments in logistics, warehousing and other allied sectors, potentially slowing Vizhinjam's growth as a global maritime hub.

Adani says stake sale follows legal process
The Adani Group has again written to the Kerala government, stating that the proposed stake sale complies with all applicable laws and regulations and that no irregularities have occurred. According to the company, the shares have not yet been transferred. After reaching an agreement with MSC, it first sought approval from the Securities and Exchange Board of India (SEBI). Only after obtaining SEBI's approval did it approach the state government for permission, as required before seeking approvals from the relevant Central and state authorities.

Dispute over investment figures
There is also disagreement over the amount invested in the first phase of the project. While it has been widely claimed that the Kerala government spent Rs 5,500 crore on the first phase, reports suggest the actual expenditure was around Rs 3,040 crore. The Adani Group, which was initially expected to invest Rs 2,454 crore, is said to have invested about Rs 4,400 crore. It is also expected to invest another Rs 16,000 crore in the remaining three phases of the port's development.

• Estimated total value of Vizhinjam Port: Rs 27,120 crore
• Revenue in the first year: Rs 440 crore

Government to seek legal opinion
The Kerala government will seek legal advice on Adani's proposal to sell a Rs 13,000-crore stake in Adani Vizhinjam Port Pvt. Ltd. to MSC. The company has submitted an application seeking the state's approval for the share transfer. The proposal is currently being examined by a high-level committee headed by the Chief Secretary. The legal opinion will focus on whether the proposed share transfer complies with the law and whether it violates any conditions of the agreement between the government and the Adani Group.