Why Vizhinjam Port matters to Kerala

With rising unemployment, the state needs a fresh spate of investments to make it truly God's own.

 |  4-minute read |   20-08-2015
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It took 24 years for the Kerala government to kick-start the Vizhinjam Port, one of the largest infrastructure projects being developed in the state with an investment of over Rs 7,500 crore. But that has how infrastructure and industrial development been in the state for decades. Marred by militant trade union activity and an overcharged political system where parties continuously play spoilsport in development, with little regard to long term progress, the state has been an underperformer on both these. And as a consequence, in employment. No wonder, then, that the state, that is high in literacy, education and healthcare indices, also has one of the highest unemployment rates, thrice the national average, and only better than some small states like Tripura and Nagaland. The Kerala Economic Review 2014, presented in the state Assembly in March this year, also said that rate of mental illness in the state is one the highest in the country. I am not sure if there's a co-relation between the two.

Many Keralites, both residents of the state and outside, would welcome the state government's signing of an MoU on August 17 with the Adani group to set up a deep sea port at Vizhinjam, some 16 kilometres from the capital city of Thiruvananthapuram. The work will start on November 1, a day that marks the birth of the state. The statistics provided by Vizhinjam International Seaport Limited are, indeed, impressive. Located on the busy East-West international shipping route, Vizhinjam, when completed in less than three years (that's what Adani has promised), will be one of the busiest ports in that part of the world. It can handle ships of 18,000 TEU (each TEU refers to twenty foot equivalent units or the size of a normal cargo container). Built under the PPP model, the operator has to develop the container yard and the terminal buildings, and operate it for a 40 year period.

The work on the port, although much delayed, will help stem the investment drought that had hit the state decades ago. None of the state owned enterprises has been in good financial health, except for the fertiliser firm FACT, which has shown some green shoots of revival after a history of labour strikes and closures. The industrial town of Ambalamugal , the most prominent industrial belt in the state, is a far cry from what it was originally meant to be. The SmartCity project, a proposed township in 246 acres on the outskirts of Kochi in tie up with Dubai Holding, has been languishing for years, the victim of partisan politics. The Kochi metro project, originally to have been commissioned by 2010, has been facing perennial delays, and has thrown city traffic in utter disarray. The only big money that seems to be coming into Kerala is remittances from its natives working overseas. In 2014-15, non-resident deposits into Kerala crossed the Rs 1 lakh crore mark for the first time, to touch Rs 1.1 lakh crore, up 17 per cent from the previous year. Kerala has around a sixth of all the money that is deposited in NRI accounts in the country. This is thanks to the lakhs of emigrants from the state, especially in the Middle East.

But for business investments to come in that can translate into projects on the ground, the state has to be more welcoming - not in terms of the slogans that are put up annually in investment jamborees like Emerging Kerala, but through a concerted effort from the various political parties to approach investment proposals more objectively, rather than resist them at the drop of a hat. A form inviting workers to join a new outfit, the Vizhinjam Port Workers Union, has already gone viral in social media, although its veracity could not be ascertained. While basic rights of workers need to be protected, the new project should not be allowed to become yet another battlefield between the promoters and the staff, and a breeding ground for petty politicking. The fact that the ruling Congress-led government in the state set aside all reservations of handing over the contract to the Gautam Adani-led Adani Ports, despite the industrialist's close relations with PM Narendra Modi, itself signified a thawing of a hardline approach in favour of development. Also is significant the meeting between Adani and VS Achuthanandan, opposition leader, despite the hardline campaign the latter's party has been carrying out against the project. In fiscal 2015, Kerala grew 6.49 per cent, below Tamil Nadu's 7.48 per cent. It has a potential to grow much more, and that need not be just from huge, smoke-belching industries - as it has proved in tourism, in the new age firms that are mushrooming at Technopark in the capital, and now in the proposed port. If such efforts help lower unemployment in the state, it will be most welcome, just as the overseas remittances that have been Kerala's mainstay for decades.


MG Arun MG Arun @mgarun1

The writer is Deputy Editor, India Today.

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