Thiruvananthapuram: It is gods own country with devils own people. This is private sector players common refrain about the state of Kerala and its inhabitants.
Kerala Industrial Infrastructure Development Corporation (Kinfra) managing director Dr G C Gopala Pillai, 52, is trying to allay that notion while meeting potential investors, for whom he is busy setting up the necessary infrastructure. That could be easy, but finding investors to use the infrastructure created thus is the toughest part.
Kerala is a place of extremes. While it ranks at the top on the human development index (infrastructure penetration, law and order, social sector, affluence, education, health and expenditure) it lags way behind as an investment destination. "Labour unions and political parties here have realised that the state has no future if there are no fresh investments from the private sector. In these days of enlightened workforce, any management should not conclude that a labourer is arrogant if he sits on a chair with his legs crossed," say Pillai.
Kinfra is actively setting up industrial parks and estates, targeting different industries, by floating special purpose vehicles (SPVs). The corporation has built sector-specific (apparel, film and video, information technology, marine food, export-promotion and industrial) parks. Kinfra has promoted 12 industrial parks of which many are functional and others are on the launch phase.
With food processing industry touted as a sunrise sector, Kinfra, under Pillai able guidance, is now building a food park at Kakkancherry in Malappuram district and is planning another one at Adoor. Following the success of the Thiruvananthapuram-based Technopark (a software park), Kinfra is now building two more IT parks one each at Kochi and Kozhikode.
Kinfra has also floated several joint ventures like ICICI Kinfra (74 per cent ICICI and 26 per cent Kinfra), Rubber Park India (a 50:50 joint venture between Kinfra and the Rubber Board) and Midcon (an equal joint venture between Kinfra and MPEDA). Midcon has, in turn, promoted the marine products park company, which contributes 26 per cent of the equity (the balance 74 per cent is shared equally by the 10 units located inside the park). "By this way we have ensured the long-term viability of the company," says Pillai.
In a brief conversation, Pillai outlines Kinfras park plans. Excerpts:
The Kerala government has announced a series of measures like declaring industrial estates as public utilities and declaring strikes as a criminal offence. While labour reforms in Kerala are imperative, isnt the state going the Chinese way with its recent decisions? In China factories are like sweat shops with labour rights trampled upon.
The new measures announced are certainly not anti-labour. In a democracy strikes cannot be banned. What we are attempting to do is to prevent wildcat strikes.
Kinfra is promoting several industrial parks. In what stage are these projects now? And how many units have occupied your parks?
Kinfra is a statutory body permitted to float subsidiary companies for different purposes. It has just 10 employees and we outsource many of the activities. The corporation, through different SPVs is building sector-specific industrial parks and estates. We are also building several estates for small-scale units across the state. Construction work is proceeding at a fast pace in some parks. And plots in all the parks are getting booked now three units in the export promotion industrial park and two in food park have started their commercial production. The Rs 20-crore Kakkancherry food park till date has attracted 12 units. All of them are expected to start their operations in six months time.
What do you think is unique about your parks?
Facilities. Unlike other states, in Kerala the single-window clearance has the legal stamp. Probably for the first time in the country the company that is promoting an industrial estate has been given the power to distribute electricity directly to the units. The Kinfra Export Promotion Industrial Park, promoted by the company, has got the licence to distribute power to the units located in its park. The company has established a substation inside the park. So units inside the Kochi export promotion park can be assured of immediate power connection. We are negotiating with BSNL to set up an exchange inside the park.
What is your strategy in marketing the parks?
We will hold roadshows about our parks to investors within and outside India. In addition we will contact chambers of commerce and other business communities.
How much money did Kinfra invest in building industrial parks? When do you expect the projects to pay back?
Till date we have invested around Rs 150 crore in building different parks. We are planning to spend another Rs 50 crore. Now we have started generating revenues. We hope to break even in 10 years time. Our payback will be in the form of lease rental, water, power charges and land sale. Kinfra is funded out of the Kerala government budgetary grant of Rs 20 crore and soft loans from the central government, which are scheme-specific.
What are the new projects you are planning?
Under the Kinfra Export Promotion Industrial Park we are planning to build a 1.25 sq ft state-of-the-art IT park in Kochi. The park will be developed either directly or through private participation. We have invited bids from consultants for the project. Out of the 180 acres, 50 acres are allotted for the IT sector. Following the food park at Kakkancherry we are planning another one at Adoor at an outlay of Rs 20 crore. This will happen in the next fiscal. At Mazhuvanoor we are planning to build cold storages, instruction centres and lab facilities at an outlay of Rs 3 crore. Similarly, at Kalpetta in Vyanad district, a known spice production centre, we will be building a collection centre and a cold storage facility