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The port sector is finding it difficult to sail past the Home Ministry's security curtain. After Adani Port SEZ, a host of other Indian companies, including Gammon, Punj Lloyd, Marg, IVRCL, Lanco, Jindal and Indian Port Terminal, are facing problems on account of denial or withholding of security clearance by the Home Ministry.
Some of these firms could have been hit because their consortium partners have not got the security clearance from the Home Ministry, say sources. For instance, Marg and IVRCL are consortium partners for a Visakhapatnam project.
These companies had technically qualified to financially bid for several port development projects.
The denials — which have come through in the last two months — affect the expansion projects of several ports, including Visakhapatnam and Tuticorin.
Like Adani Port SEZ (erstwhile Mundra Port SEZ) — which has been facing a similar problem for a year now — these firms have received approvals from the Ministries of External Affairs and Defence. Business Line confirmed this from several official sources.
SECURITY TANGLE
The security clearance is mandatory for all companies that seek to participate in the development of major ports in India.
The clearance is obtained by the Shipping Ministry from the External Affairs, Defence and Home Ministries.
In the current fiscal, financial bids for many port development projects have either not been invited, or invited but not opened, because of the pending security nods. Finally, in December 2011, the matter was escalated and a high-level committee met at the Cabinet Secretariat with representatives from all agencies to expedite decisions.
Like the Adani Port SEZ, the impacted companies may not have been “formally” informed. But the Home Ministry has conveyed the information to the Shipping Ministry, which, in turn, has informed the relevant Port Trusts.
Several of the these firms, including Adani Port and Gammon, are listed on the stock exchanges and also have stakes in ongoing port projects. Gammon is operating a terminal at Visakhapatnam port, and has won rights to operate terminals at the Mumbai and Paradip ports. A special purpose vehicle of Marg — Karaikal Port Pvt Ltd — operates the Karaikal Port.
Without divulging specific details, the Shipping Minister, Mr G.K. Vasan, recently said that security clearance was becoming a big hurdle in the development of the port sector.
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