Uncertainty hangs over Mundra LNG project
If they don’t stop arguing GSPC and Adani will be forced to postpone the commissioning date of their proposed 5m t/y Mundra LNG terminal beyond 2016 - or cancel it all together! GSPC, we hear, is threatening to abort EPC tender work if Adani continues to block the shareholder agreement, the Mundra Port sub-concession agreement and environmental clearance for the LNG project.
GSPC and Adani have been arguing over the shareholder agreement for the past five years. GSPC holds 50%, Adani holds 25% and the remaining 25% is still in limbo, meant for a ‘strategic partner’.
In 2011, Adani lobbied hard to increase its stake to 50%. “Gujarat's government almost agreed but GSPC said no," we hear.
Former finance minister Vaju Vala was so tired of Adani’s demand for a larger stake that he asked GSPC to take a “commercial decision” and keep the government out of it. Nine months ago GSPC asked Adani to transfer the Mundra Port sub-concession agreement that governs the use of the Mundra waterfront to GSPC LNG, a SPV set up to execute the project, but Adani refuses.
A sub-concession agreement is issued by the Gujarat Maritime Board. Earlier this year, GSPC also asked Adani to transfer environmental clearance for the Mundra terminal to GSPC LNG but again, Adani has failed to comply.
Adani’s stubbornness, we learn, stems from close friendship between boss Gautam Adani and Gujarat chief minister Narendra Modi, who took time off to attend the wedding of Adani's younger son Karan, 25, on February 13 in Goa.