Indian firm denied port bid on security grounds

The denial of security clearance to the Adani Group's bid for developing and operating a container terminal at Jawaharlal Nehru (JN) port near Mumbai is a first for any Indian firm since the nation opened its ports to private investment in the late 1990s, reported the Mint.


The government has earlier denied such clearances to Chinese companies or only those with Chinese connections.


The Ahmedabad-based group has challenged the decision in court.
Price bids for port contracts are typically opened after pre-qualified bidders are granted security clearance by the cabinet committee on security.


The Adani Group bid for the US$1.5 billion JN port project through its flagship firm Adani Enterprises and Mundra Port and Special Economic Zone (MPSEZ), which operates India's biggest port at Mundra in Gujarat. Spanish firm Isolux Corsan SA is also a member of the group.


Of the five groups that submitted price bids to the trust that runs India's biggest container port, only the group led by MPSEZ was denied security clearance this month. The trust is yet to open the price bids of the remaining groups because of a Supreme Court case involving another firm that was decided on 11 May.


"How do we become a threat to national security?" asked Rajeeva Sinha, a director at MPSEZ. "We are an Indian company and all our directors are Indians. We want to know the reason for the denial."


Sinha said the group was not given a show-cause notice, nor did the government seek clarifications ahead of taking the decision.
"I am myself perplexed; it has not happened before," said R. Kishore, president of the industry lobby Indian Private Ports and Terminals Association.


MPSEZ operates ports at Mundra and Dahej. It is developing a multi-cargo port at Hazira. All the three are in Gujarat. The company has also won contracts to develop coal-loading facilities at Union government-controlled ports located at Mormugao and Visakhapatnam. Both these contracts were awarded after the group passed the security test, Kishore said.


"The decision to deny us security clearance was not objectively done; that's why we have challenged it in the Mumbai high court," Sinha said. The group has filed a petition slated to come up for admission on 7 June.


A spokesman for JN port declined comment because of the sensitive nature of the issue.


"We are not supposed to know on what grounds it (security clearance) was denied," a JN port official briefed on the matter said, requesting anonymity.


Shipping secretary K. Mohandas was not immediately available for comment.


Wuhan Kaidi Electric Power and China Harbour Engineering are two notable Chinese firms that have been denied security clearance in the past.
(Source:http://www.cargonewsasia.com)