As a part of its initiave, the Centre has given a fresh lease of life to many public sector units here. The latest in a slew of new projects gifted by the Centre is a unit of Hindustan Aeronautics Limited (HAL) in Kasargod in north Kerala. HAL would make an initial investment of Rs 66.31 crore at this unit, which would come up on 200 acres of land in the next fiscal. The HAL had decided for Kasargod when the state-owned industrial parks in north Kerala had failed to woo private investors. Around 500 acres of land developed by Kerala State Industrial Development Corporation, a government agency, have been lying idle for the past five years. The HAL unit in Kasargod would assemble and manufacture six types of air-borne mission computers. Later, the unit would also focus on systems for medium lift helicopter and fifth generation aircraft. Production would begin in the next fiscal.

Early this year, the Defence Ministry’s BrahMos Aerospace took over Kerala Hitech Industries Limited (KELTEC) in Thiruvananthapuram. This was heralded as a new phase in the state’s development, as the venture was expected to attract an investment of over Rs 1,000 crore in the next few years. KELTEC had been earlier doing fabrication works for ISRO. The Thiruvananthapuram-based facility of BrahMos Aerospace has been envisaged for assembling BrahMos missiles. The new assembly line for missiles will be ready within three years. It would also continue to do fabrication jobs for ISRO.

Kozhikode was also a venue for Centre-state partnership. Here, a sick steel unit was battling for life. The state-owned Steel Complex Limited (SCL) signed an MoU with Steel Authority of India Limited (SAIL) for floating a joint venture to produce TMT steel bars. The joint venture envisaged 50:50 equity partnership between SAIL and SCL.

The venture would see SAIL pumping Rs 300 crore into the project. Despite the burgeoning demand for iron and steel products, SCL had been so far unable to come out of red due to mismanagement. At one time, it had even faced closure threat.

For SAIL, the joint venture had come in handy, as it had been looking for a production base in south India to cater to the mounting demand for steel products in the region.

The National Thermal Power Corporation (NTPC) has entered into an agreement with the Transformers and Electricals Kerala Limited (TELK) for manufacturing and maintenance of transformers. In the proposed venture, NTPC would have 44 per cent stake and would invest Rs 190 crore in TELK in the first phase of revamping.

Even Lalu Prasad Yadav had chugged into Kerala to help out a crisis-ridden state unit. The Indian Railways had signed an agreement with Kerala Government in June this year for a joint venture with the fabrication unit, Autocast, in Alappuzha. The new enterprise would make bogie frames for passenger coaches as well as wagons, utilising the land and other assets of Autocast. The state would clear all liabilities of Autocast and Railways would have 51 per cent stake in the company. The Railways had also zeroed in on Kerala’s Palakkad district for establishing a railway coach factory that would see an investment of Rs 4,000 crore.

The PSUs had decided to invest in Kerala at a time when the state was unable to raise finance to keep its debt-ridden undertakings afloat. Banks had been reluctant to pump in money into such units after the state Government had failed to honour its earlier guarantee for the bank loans. In many cases, banks had revoked the Government guarantee, impairing the image of the state. PSUs in Kerala owe more than Rs 500 crore to the banks.

In the past, attempts to revive PSUs had been lost in the labyrinth of public debates on graft. The Centre-state tie-ups had emerged hassle-free with a short gestation period. This pragmatic approach towards development would hopefully also serve the purpose of confidence-building among private investors.