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Adani, Gammon, Punj Lloyd may sail past security test for port projects - 2013-05-02

Adani Port SEZ, Gammon Infra and Punj Lloyd may get off the Home Ministry’s security hook soon, clearing the way for them to bid for port development projects. This is based on inputs provided from the Home Ministry to the Shipping Ministry for security clearance. Companies wanting to build and operate port terminals in India require mandatory security clearance from various Government arms such as External Affairs, Defence and Home. The clearance is processed by the Shipping Ministry, based on inputs from these Government arms.

During the last three years, many firms, including Adani, Gammon and Punj Lloyd, had been denied such an approval. This had stonewalled their attempts to bid for port development projects. Some firms that were denied security nod — Adani Port and Gammon — even had exposure in operational ports such as Mundra, Kandla, Mormugao and Visakhapatnam. The level of concerns raised by the Home Ministry is relatively low now, a move which will enable the Shipping Ministry, State Governments and Port Trusts, to take a positive view on security clearances for these firms, a Government official told Business Line, on condition of anonymity.

Usually, the Home Ministry provides different grades of inputs to the Shipping Ministry on the issue. “These could range from ‘all clear,’ to concerns raised on account of economic offences leaving the Shipping Ministry or ports to take a final call, or simply denials for security reasons,” another source explained Business Line.

For Adani Ports, there is a clear dilution of concerns raised — from denial to references to ongoing economic offence cases. Business Line could not ascertain specific details for other firms. The Shipping Ministry had streamlined the process for security clearances in December 2012. It had defined specific time lines for processing of clearances, apart from specifying that any decision on security nod would be valid for three years, unless there is a change in management control or change in over 10 per cent ownership.

It had also said that all State Governments have to get security clearances for their ports. Some of the big projects that will come up for bidding this year include the fourth container terminal at JN Port, mega container terminal in Chennai and expansion of container terminal in Visakhapatnam. A year ago, Shipping Minister G. K. Vasan had also raised concerns on the delayed and pending security nods.

Source : Hindu Business Line