Former bureaucrats write to TN govt flagging risks of Adani-Kattupalli port expansion

The bureaucrats said the government would be “well within its rights” to shelve the proposal.
Adani group Kattupalli Port
Adani group Kattupalli Port
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Several former IAS and IPS officers have written to Tamil Nadu Chief Minister MK Stalin about the purported risks of the Adani-Kattupalli port expansion, stating that the government would be “well within its rights” to shelve the proposal “solely on the considerable financial risks that it entails”. Signatories of the letter were retired IAS and IFS officers, and included SP Ambrose, MG Devasahayam, EAS Sarma, Madhu Bhaduri, Kamal Jaiswal, Meena Gupta, Gopalan Balagopal, Sundar Burra and Joy Oommen IAS.

The Kattupalli port expansion project has already seen significant opposition from locals as well as environmentalists. As of the December 2020 Kattupalli Port Revised Master Plan, the port is to be expanded from 330 acres to 6,111 acres covering environmentally sensitive areas that have mangroves and wetlands, as well as water bodies. 

In a letter written by Adani Ports & SEZ (Southern Ports) CEO Ennarasu Karunesan to the Tamil Nadu Maritime Board in September 2018, the firm states it is proposing to develop Kattupalli port to become a 30-berth port and that it will handle “all types of cargoes in a phased manner with an investment of approximately Rs 4000 crores towards marine infrastructure”. This fund infusion, Adani states, is being contingent “upon the projects having longer time to operate, as the gestation period for the project is long and the viability for such large projects is not possible in a short duration of time considering business cycles”. 

It further adds that it cannot receive funds from investors and banks with the existing licence of 30 years, and asks for the license period to be extended to 99 years or run concurrently with the lease for TIDCO land. 

The former bureaucrats in the letter to the state government called this an “audacious attempt to milk the state exchequer”, and “hints at significant risks that the government of Tamil Nadu should be aware of, especially given Adani’s track record in other jurisdictions.”

Adani’s demands, the letter further adds, does not bode well for the state. The letter refers to the instance of the Comptroller and Auditor General highlighting the Vizhinjam port deal in 2017. The CAG said that the concession agreement went against the interests of the state government, and that by allowing an extra ten-year concession period (from 30 years to 40 years), Adani group earned more and it caused a loss to the exchequer. 

“If Adani’s business plan states that the project is viable only with a 99-year concession period, there is a real risk that the government of Tamil Nadu will be saddled with a white elephant if it were to go ahead with the same project with the standard 30-year concession. Extending the concession period is not an option, as it would entail a massive revenue loss to the state,” the letter stated. 

The letter adds that the proposed expansion of the port has received enough opposition from local residents fearful of sea erosion, loss of livelihoods and pollution, as well as Chennai residents “as the proposed developments are seen to aggravate flooding risks and salinity intrusion into aquifers that supply the city”, and that these concerns are significant enough. 

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