A tweet from the Competition Commission of India (CCI) on September 20 said it all: “Commission approves proposed acquisition of 10.40% equity shareholding of Gangavaram Port by Adani Ports and Special Economic Zones Ltd”. According to a combination notice filed with the fair trade regulator, the 10.4 per cent equity shareholding will be acquired from the government of Andhra Pradesh.
The fair trade regulator’s tweet comes in the wake of the Andhra Pradesh government’s decision to hive off its 5,37,31,700 shares in Gangavaram Port Limited (GPL), a debt-free entity that operates a deep-sea port near Visakhapatnam. Almost 80 per cent of the public sector company Rashtriya Ispat Nigam Limited’s (RINL’s) business passes through the port.
The CCI’s approval means that GPL can now be merged with Adani Ports and Special Economic Zone Limited (APSEZ), one of India’s largest commercial port operators. APSEZ is present across 11 domestic ports in six States—Gujarat, Goa, Kerala, Andhra Pradesh, Tamil Nadu and Odisha.
The Jagan Mohan Reddy government’s decision to sell its stake in GPL has been strongly criticised by employees, workers’ unions, the Left parties and even business forums such as the Forum for Development of North Andhra (FDNA), all of whom called on the State government to rescind its decision. Ironically, the benefits accruing to the State government from this merger are still shrouded in mystery, with many pundits astonished to see the State parting with its stake in a port that is an integral part of the navaratna public sector company Visakhapatnam Steel Plant (VSP) as all the raw material and finished products are handled through it.
Members of various workers’ unions question the need to disinvest in GPL considering that the Gangavaram port is a profit-making and debt-free entity, which has, since 2016-17, consistently paid the State government dividends totaling Rs.83.27 crore a year. They also question the Jagan Mohan Reddy government’s decision to disinvest its stake in the port even when there is no specific State government policy on disinvestment, particularly in profit-making companies. Union leaders also question the State government handing over 1,800 acres of land (which was part of the 22,000 acres acquired in the 1970s for the VSP) that is valued at more than Rs.3,000 crore when all that it is getting is a paltry Rs.650-odd crore. But an undeterred Jagan Mohan Reddy has gone ahead with the sale.