Activist demands probe into G’varam Port sale to Adani

Visakhapatnam: A social activist and former IAS officer has asked CAG to conduct an independent probe into loss caused to the exchequer due to the Andhra Pradesh Government’s decision to sell its 10.4 per cent share in Gangavaram Port Limited to the Adani Group for Rs 644 crore.

In a representation submitted to CAG G C Murmu, E A S Sarma, who served as Secretary in Government of India in various positions, pointed out on Sunday that the AP Government sold its 10.4 per cent equity share in Gangavaram Port to the Adani Group in mid-2021 for Rs 120 per share, at a total value of Rs 644 crore without going through any competitive bidding procedure as required by the Centre’s disinvestment guidelines, thus deliberately allowing the transaction to be non-transparent, apparently to benefit the buyer (Adani Group).

The Gangavaram Port is a minor port set up over an extent of over 1800 acres originally acquired by the State Government for RINL’s Visakhapatnam Steel Plant, the market value of which would exceed Rs 10 crore per acre. Such a highly valuable stretch of land was allotted to Gangavaram Port promoted by private developers, at a nominal value. The port has the strategic advantage of being the gateway for the steel plant, readily acquiring a captive market without any effort. In other words, the State Government’s equity share in Gangavaram has a special value in terms of the location of the port adjacent to the steel plant, he said.

Sarma said in the e-mail complaint that initially the Adani Group acquired Warburg Pincus’s equity share of 31.5 per cent and the promoter’s equity share of 58.1 per cent, apparently at Rs 120 per share though those transactions remained wholly non-transparent, especially in view of the Adani Ports SEZ (APSEZ) offering equity shares in itself to both Warburg Pincus and the promoters of Gangavaram Port.

Keeping these developments in view, the State Government ought to have retained its own equity share in the port, in view of its strategic location. Perhaps under extraneous pressure, it rushed into selling its own equity share of 10.4 per cent to the Adani Group at the same price, without even attempting to go through a competitive bid process and without making an independent assessment of the true value of Gangavaram Port, its location and its assets, he stated.

“There have been reports that suggest the value of Gangavaram Port to be far higher than the value reflected by a share value of Rs 120 at which all the three original shareholders, namely, Warburg Pincus, the D V S Raju family that promoted the port and the government sold their respective shares,” the former bureaucrat said.