The Andhra Pradesh government has permitted Aurobindo Realty and Infrastructure Pvt Ltd to secure lion’s share stakes in Kakinada Gateway Port Ltd (KGPL) and the close by Kakinada Seaports Ltd by deferring a limitation in the concession understanding for KGPL that banned its engineer and administrator from holding more than 25% stake in another port situated inside 75 km. Since Kakinada Gateway Port and Kakinada Seaports Ltd are inside the 75 km of one another, Aurobindo Realty couldn’t have gained controlling stake in the two ports without the waiver.
In September 2020, Aurobindo Realty and Infrastructure marked an arrangement to purchase the 51% stake held by GMR SEZ and Port Holding Ltd (a completely claimed unit of GMR Infrastructure Ltd) in Kakinada SEZ Ltd for ?2,610 crore including sub-obligation.
As a feature of the arrangement, 100% value in the arranged Kakinada Gateway Port Ltd held by Kakinada SEZ (KSEZ) was additionally to be moved to Aurobindo Realty, as per a declaration by GMR Infrastructure on September 25 a year ago. KSEZ is building up a port-based multi-item exceptional monetary zone at Kakinada in East Godavari locale.
Kakinada Gateway Port Ltd was granted an agreement by the Andhra Pradesh government to set up a Greenfield business port in Kona town of East Godavari area.
While the offer of the SEZ unit was affirmed by the Board of Approvals in the Commerce Ministry, the leeway from the Andhra Pradesh government for the connected port arrangement pursued into complexity Aurobindo procured a larger part 41.12 percent stake in the close by Kakinada Seaports Ltd, disregarding the 75-km proviso in the concession settlement for Kakinada Gateway Port.
To encourage freedom for the port arrangement from the Andhra Pradesh government, KSEZ and Aurobindo proposed to restrict the value of KSEZ in Kakinada Gateway Port to 74 percent with the equilibrium 26% stake to be held by GMR SEZ and Port Holding Ltd.
‘No supreme limitation’
The State government looked for lawful assessment from Justice VN Khare, a previous Chief Justice of India, who said that the concession understanding didn’t put “a flat out limitation and is dependent upon waiver by the Authority”.
The AP government chose to give an exclusion to Auribindo “with a condition that the objective towards speculation and work proposed by Aurobindo ought to be accomplished, bombing which the Authority is at freedom to make a vital move, by going into a strengthening consent with that impact,” R Karikal Valaven, Special Chief Secretary wrote in a March 10 request.
The public authority has additionally allowed GMR SEZ and Port Holding to obtain 26% value in Kakinada Gateway Port from KSEZ, he added.
Aurobindo plans to contribute 3,500 crore to construct the port for dealing with around 16 million tons (mt) of load a year in the main stage.