The Hindu : Andhra Pradesh News : Kakinada SEZ’s fate hangs in balance

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Saturday, Jan 03, 2009
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Andhra Pradesh

Andhra Pradesh

Kakinada SEZ’s fate hangs in balance

Staff Reporter

KAKINADA: The fate of Kakinada Special Economic Zone (KSEZ) hangs in the balance as the majority stakeholder, Kakinada Seaports Private Limited (KSPL), is in apparent need of a replacement for the GMR Group which is reportedly thinking of exiting the joint venture.

The Oil and Natural Gas Corporation (ONGC) has backed out of its proposal to set up a refinery for which the special purpose vehicle KSEZ Private Limited was formed, having decided to confine itself to exploration activities instead of foraying into the risky refining business. KSEZ was in the eye of a political storm with major political parties opposing forcible acquisition of land from the poor.

ONGC reason

The main reason for the change in ONGC’s stand was the availability of excess refining capacity in the country, which would render its refinery non-profitable.

On its part, GMR Group which came as the replacement, expressed its lack of interest in being an active partner on the pretext that its stake was small. Commenting on these developments at a press conference here on Friday, Union Minister of State for Defence M.M. Pallam Raju said he spoke to the GMR officials and was told that the company’s minority stake was not encouraging for its participation in joint venture.

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