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Finally Kerala hops onto infra fast lane
It is often said — only in half jest — that foreign tourists take about 12 hours to reach Kerala and about the same time to reach their destination within the state. Reason: the narrowest, most potholeinfested highways in India.
Kerala is better off than many states on a number of social and economic indicators, but infrastructure is not one of them. The state is also a tourism hotspot, blessed with a glorious mix of beaches, backwaters and hills and lovely climate, but tourism-related infrastructure has long been in a shambles. Kerala’s economic landscape is freckled with such disconcerting dichotomy.
It has three international airports — a fourth one about to be commissioned at Kannur — but the roads connecting them are terrible. It has many upscale hotels and super specialty hospitals but the quality of drinking water and waste management are awful. But change is in the air, finally. Kerala Finance Minister TM Thomas Issac, who presented the first budget of the Left Democratic Government (LDF) last week, announced an anti-recession investment package of Rs 12,000 crore to be spent entirely on infrastructure projects.
Time to Hurry Issac had said the state is in a hurry to build its roads, bridges, ports and railways. “We have no time to lose,” he said before he presented the budget, referring to the shadow on Kerala’s remittance economy due to the economic woes in the Gulf that has already left many workers out of jobs. To be sure, the state has been making aggressive investments in infrastructure in the past decade.
After the completion of the Cochin International Airport Project — the first airport in the country to be built with private participation — the state launched major tourism projects by roping in nonresident Keralites. A chain of large hotels, shopping, malls and convention centres sprouted in different parts of the state rapidly. Medical tourism got a fillip when NRI money was pumped into building super specialty hospitals.
Soon after, the central government did its bit. A slew of projects, including major ventures such as the LNG Terminal project, the Vallarpadam Container Transhipment Terminal and the expansion of the BPCL refinery, formerly the Kochi Refineries Ltd were launched. The only hitch was all the projects were located in Kochi, limiting the scope of development.
The current phase of infrastructure development bears no such inconsistency (see Kerala’s Infrastructure Push). It is spread throughout the state and covers a raft of sectors ranging from airports to ports to roads.
In ports, much is expected from the development of the Vizinjam Container Port by Adani. The government hopes that the Vizinjam port would offer competition to Colombo port as it has a natural depth of nearly 20 metres, and ergo, allow even very large container carriers to anchor at the port (the previous Congress-led government signed the deal with Adani). Work on the Kochi Metro Rail project is progressing at a brisk pace. The first phase of 18 km of the Rs 5,100-crore project would be completed by early 2017. Plans are already underway to launch “light metro” projects in Thiruvananthapuram and Kozhikode.
The good news is that the drubbing the Congress-led UDF Government received in the assembly election this May has not changed the big picture. A Left front government is not usually known to be business friendly.But Chief Minister Pinarayi Vijayan seems to be not cut from the same cloth as his other Marxist colleagues. After his first meeting with Prime Minister Narendra Modi, he made it clear that his government will give top priority to the completion of two long pending projects, the GAIL Pipeline project connecting Kochi with Mangalore and the widening of the highways. Still, the achingly slow pace of widening of highways in the state is a grim reminder of the challenges before the state government.
The delays were due to opposition to land acquisition in many areas. Finally, the previous government decided to limit the width of highways at 45 metres. The central government has given into the state’s demand on the width. Likewise, in the case of the GAIL project, it was the opposition from some areas in Malappuram and Kozhikode that delayed the project. Another worry is the terrible state of finances.
Kerala is grappling with rising revenue deficit and slow growth of tax revenue. No wonder the budget offered little leeway for measures to step up capital expenditure. That means the Rs 12,000 crore for infrastructure will be raised outside the budgetary framework, by floating a special purpose vehicle and making use of the SEBI and RBI approved financial measures.
Now or Never Despite these challenges, development of infrastructure is inevitable. In its election manifesto, the LDF promised to create 25 lakh jobs in five years. The road to that target is through infrastructure. Kerala does not have much land to spare for industrialisation. The state also faces a severe shortage of power. The only way to attract industrialists is to create good infrastructure.
Industry leaders say the government should focus on road development and better waste management techniques. “We have to urgently address these two problems,” says Jose Dominic, CEO of CGH Earth group of hotels. He says the tourism industry in the state which reached a peak in the early 2000 is witnessing a major slowdown. Cyriac Davies, MD, Kitco Ltd, says there is no shortage of money or technology. “What is needed now is the political will.” Wade Boggs Jersey
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