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Last Updated Wednesday April 25 2018 10:31 AM IST

Strikes could scare away investors from Kerala

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Strikes could scare away investors from Kerala Kerala has fallen off the consideration set of many investors, as frequent strikes vitiate the state’s business atmosphere.

Kochi: A small group of 30 can delay, or even kill, a project that will be beneficial to 3.25 crore people- the entire population of Kerala. That, unfortunately, is the state of affairs in God’s own country.

Kerala has fallen off the consideration set of many investors, as frequent strikes, most of which are uncalled for, vitiate the state’s business atmosphere and authorities do nothing to improve the situation.

This also explains why Kerala remains low down on the Niti Aayog’s list of business-friendly states. The think tank seeks the experience of investors while preparing the list. Kerala is unlikely to find much favor here.

Read: interview with KPMG's Arun M Kumar

The first wave of opposition to industrial projects is usually from the locals. While this would often be instigated by outsiders with vested interests, environment issues that are often fake or flimsy, court observations, studies ostensibly conducted by local groups and even bullying tactics are used to scare away investors, pointed out G Vijayaraghavan, one of the pioneers of IT business in the state.

Invariably, it all starts with questions over safety or pollution risks.

The doubts never go off no matter how many times the safety measures are explained. A probable reason is the involvement of vested interests.

Strikes against Indian Oil Corporation’s LPG plant gained strength when work on the project was nearly over. But no one was mindful of the nearby LNG tanks, which also should have raised similar concerns.

The irony was that the opposition was against setting up of storage facilities for the very cooking gas that almost everyone stocks and uses at home, said Vijayaraghavan.

An expert committee that recently submitted its report on the issue seemed to have favored the project. Now the demand is to wait for the report of another panel before proceeding further.

The recent agitation against the Vizhinjam seaport project was instigated by local interests.

In all these issues, political parties don’t usually take any firm stand and resort to what suits them the most locally.

Often, misinformation is used to build public sentiment against industrial and infrastructure projects.

One of these was over highway widening — the campaign was that 21 lakh houses would have to be pulled down or relocated. The total length of highways in Kerala is 750 kilometers, or 7.5 lakh meters (15 lakh meters if both sides are taken). If the project were to destroy 21 lakh houses, there should be houses that were less than one meter in width. That isn’t the case in Kerala.

Some outfits that claim public support bring in outsiders to create trouble by infiltrating into local groups, top police officials believe. The GAIL pipeline, which was laid without any issues in several districts, faced opposition in just a few pockets. This, they believe, is due to the involvement of such outfits.

The opposition to road widening was also believed to be instigated by some militant groups. Some organizations that don’t have any political space are also triggering discontent against such projects. Often, established political parties take over the campaigns, which then spill over to the social media creating wider panic, industry experts said.

In LNG and LPG, the investors are public sector companies.

One of the reasons for such projects getting stuck is because top officials of these central PSUs are unaware of the ground situation in Kerala, officials at the state industry department pointed out.

While the agitations against such projects go on for some time, there are also flash strikes that disrupt the business atmosphere.

The truckers’ strike at the Irumpanam IOC plant and that at the Vallarpadam terminal have caused huge losses. Some of these strikes may have been called for by trade unions to just demonstrate their influence.

When there is a move to acquire land for a bypass, an action council is invariably formed to oppose it. The usual demand will be to drop the plan and, instead, widen the existing road.

It will often be impossible to widen the existing roads by razing huge buildings on both sides and that many be the very reason for considering the bypass project. Those who are opposing the bypass project will be just a handful who might lose part of their land or have to relocate, said Tomy Cyriac, the project director at the Rapid Rail Transit System.

But that still delays the project, at times indefinitely.

Some of the anti-industry groups active in Kerala are foreign-funded, former additional chief secretary T. Balakrishnan said.

Blocking the funding routes will stop their activities. That is how the agitation against the Kudankulam nuclear station in Tamil Nadu was contained. Some elements against Russia wanted to oppose the project that uses Russian technology. The protests ended when the funding channels were identified and blocked.

A few employees at a Kochi factory, who were fired over indiscipline, had started a campaign against the company blaming pollution from the plant.

The same people returned as local body officials and canceled the company’s permit, which the high court later restored.

The real estate mafia is also active in several places to pull down land prices around industrial units by instigating public campaigns. They acquire the land once the prices are dropped.

Three key infrastructure projects- GAIL pipeline (Rs 3,263 crore), Kochi-Selam LNG pipeline (Rs 2,200 crore) and Vizhinjam seaport (Rs 7,524 crore)- are set to bring Rs 12,987 crore of investment into Kerala.

But the increasingly frequent roadblocks are hurting the implementation. Such experience would only cause investors to avoid Kerala. That will be a huge setback for us.

Read: Latest Business news | ATC to buy tower businesses of Vodafone, Idea for Rs 7,850 crore

The opinions expressed here do not reflect those of Malayala Manorama. Legal action under the IT Act will be taken against those making derogatory and obscene statements.

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