Tata Group Seeks Kerala's Approval For ₹10,000 Cr Shipbuilding Investment

The Tata Group has sought approval to invest ₹10,000 crore ($1 billion) in shipbuilding in Kerala, Chief Minister V D Satheesan said, in what could mark the conglomerate's entry into the sector.

"Tata is ready to invest in shipbuilding. We are going to provide the land," Satheesan told the media, adding that the proposal may get a nod from the state within a month.

The development comes almost two weeks after Mediterranean Shipping Company (MSC) Group's plan to acquire a 49% stake in Adani Vizhinjam Port Pvt Ltd (AVPPL) in Kerala became public.

If the plan is cleared, it will mark the entry of the $180-billion conglomerate into commercial shipbuilding. Group company Tata Steel is already one of the largest domestic suppliers of specialised steel to shipyards, including high-strength grades used for commercial vessels.

India aims to become one of the top five shipbuilding countries by 2047. At present, the country's share in global shipbuilding is around 1%.

Andhra Pradesh is separately working on a ₹30,000-crore shipbuilding project at Visakhapatnam involving central public sector undertakings such as Mazagon Dock Shipbuilders. In June, South Korean firm HD Hyundai Group confirmed plans for a ₹38,000-crore shipbuilding hub in Tamil Nadu's Thoothukudi.

Adani Stake Sale Controversy

Satheesan's remarks came days after the Adani Group's $1.4-billion stake sale plan at AVPPL ran into controversy, with the chief minister saying the state government was not informed about the transaction and that state clearance was mandatory. Following this, the Adani Group submitted its proposal to the state government.

Satheesan said the government has constituted an empowered committee headed by chief secretary Bishwanath Sinha to examine the proposed share transfer. "We have constituted an empowered committee. There is a procedure. The government will follow it. Only a decision that protects the state's interests will be taken," he said, rejecting the Opposition's claims of a "big deal."

He also accused the previous CPM-led government of waiving a penalty of about ₹219 crore that Adani Port was liable to pay for delays in completing the Vizhinjam project. He said the project, originally due for completion in 2019, was delayed, and the concession period was extended by five years, from 40 to 45 years, instead of imposing the penalty of ₹12 lakh a day for delays, which added up to ₹219 crore. "They waived every single rupee of it. They waived it in two stages," he alleged.