Kerala Centre steps in to revive state’s dying industrial units

Shaju Philip

: Private investors are still wary of stepping into Kerala, where business dreams of many entrepreneurs have wilted in the not-so-friendly atmosphere. But in a welcome break the UPA Government has made Kerala a new investment destination, even though the CPI(M) in the state leaves no chance to criticise the Centre on developmental issues.

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.

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