Odisha govt may make exit clause more stringent

Reports indicate that Odisha government plans to make the exit clause for the promoters of non-major ports in the state more stringent.

According to the revised norms, that is considered by the state government, original promoters of a non-major port must retain at least 51 per cent stake for three years from the date of commencement of commercial operations.

The commerce and transport department of the state government proposes to make the above change in the concession agreement with port developers. The existing condition allows dilution of equity to below 51 per cent after a non-major port starts these operations.

The department also plans to make third-party audit of port operations mandatory during the port’s construction phase.

If the revised norms are finalised, Tata Steel and Larsen & Toubro may find it difficult to offload their 50 percent stake each in Dhamra Port Company (DPCL).

DPCL is a 50:50 joint venture between Tata Steel and Larsen & Toubro and it began commercial operations in May 2011.

Earlier, there were reports that both Tata Steel and L&T would sell off their entire stake in Dhamra, a deep draught port along the coast of north Odisha, to the Adani Group. Later, L&T denied stake sale plans, maintaining that Dhamra port ownership was currently under ‘status quo’.