Promoter CVR Group’s financial troubles cause uncertainty
Adani Group has commenced due diligence of the Krishnapatnam Port in Nellore district.
“At present, the port is in a mess. This will continue till the new management takes over,” said a top KPCL official on condition of anonymity.
Hyderabad-based engineering major CVR Group owns a majority stake in Krishnapatnam Port Company Ltd. (KPCL).
Till recently, things were smooth for the CVR Group, which got into a deep financial trouble when the Andhra Pradesh Government cancelled the ₹3,200-crore Polavaram Hydel power project awarded to Navayuga Engineering, the flagship company of the group.
Cancellation of the Polavaram project and the economic slowdown have hit operations of the group and KPCL. Since then, the promoters were looking for a suitor to bail it out.
Incidentally, Adani Group had expressed interest in the port as part of its plan to expand its reach in the east coast. In 2016, Adani Group acquired the L&T Kattupalli Port, about 30 kms from Chennai Port, adjoining the Ennore Port. Besides, it also constructed a container terminal in Ennore Port.
A ‘competitor’ port
Krishnapatnam Port is located about 180 km from Chennai, in Nellore District. It is a deep draft port with modern facilities and had an edge over the century-old Chennai Port and Ennore Port by attracting dusty cargo such as coal and iron ore.
Last year, the port had handled over 54 million tonnes of cargo.
“Normalcy will return to the port once the due diligence is over. Until then, we are asking our customers and visitors to postpone their trip. Moreover, the port does not have a competent authority at the top to grant permission for large groups to enter the port at this point of time,” said another official.
Despite all these developments, export and import activities are on at the berths as usual.
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