New Delhi, Mar 1 (IANS): An Union Cabinet here on Thursday gave the in-principle approval for divesting the Centre's stake in the Kamarajar Port Limited (KPL) to the Chennai Port Trust (ChPT).

"The cabinet committee on economic affairs, chaired by the Prime Minister has given 'in-principle approval' for strategic disinvestment of 100 per cent equity shares of Government in Kamarajar Port Limited to the Chennai Port Trust in a single stage process by following 'arm's length' principles," the official statement read.

The government and ChPT hold 67 per cent and 33 per cent shares, respectively, in KPL, it said.

It would help avoid duplication of capacity creation in ports and better human resource management between the two ports would increase efficiency of the both, it said.

"ChPT and KPL will be able to evolve a clear policy on focus areas by devising optimum business strategy and defining dedicated cargo profile," it said.

Kamarajar Port, located on the Coromandel Coast, is about 24 km north of the Chennai Port.