Infrastructure Opportunities in Kerala

Following on from our June sector report where we highlighted the recent Built Environment Mission to India, in this month’s view I take a closer look into the infrastructure opportunities and development plans in the state of Kerala.

The state, whose growth rate exceeds that of high-achieving Gujarat, reported a 9.5% growth rate in 2011-12, reflecting the local government’s efforts to work with industry and international players.

Located in the south-west region of India, Kerala is well placed as a natural international hub with a large coastline of 590 km. It counts with 17 small ports along the coast, 7 of which have plans for further development, which will ease exporters’ transport costs.

Moreover, Kerala counts with a large base of skilled labour, making it an attractive destination for sectors such as IT and other knowledge-based sectors. Two proposals for National Investment Manufacturing Zones (NIMZ) within the state will help rush large-scale construction projects, creating industrial parks and IT hubs. These NIMZ are part of the central government’s efforts to encourage more manufacturing activity and incentivise investment. Kerala also counts with stunning scenery which every year attracts a large number of tourists to the region. Hence demand is growing for world-class accommodations and related infrastructure.

To keep up with the state’s ambitions, the government needs to work on further developing social and physical infrastructure. During the Built Environment Mission to Kochi in June, we met with government bodies who briefed delegates on their plans for upgrading infrastructure in ports, highways, rail, water, power and waste. Below you will find a summary of these plans and areas of opportunity:

Areas of Opportunity

Transport

With a rail network of 1,148 km and 200 stations, there are plans for mass rapid transit systems in the cities of Kochi, Thiruvananthapuram and Kozhikode, which will help reduce traffic congestion and improve overall connections.

As the popularity of monorails grows, Kerala is planning its own single-rail mass transit system. In the capital city of Thiruvananthapuram the monorail will have 19 stations and will cover 20 km. Authorities are currently looking for bilateral funding and inviting companies to tender for civil works. In Kochi the length will cover 26 km and 22 stations, currently in the planning stages and with opportunities in engineering, procurement and construction.

Airports

Kerala has three international airports in Thiruvananthapuram, Kochi and Kozhikode, with plans to build a fourth one in Kannur.

Water

Kerala’s backwaters could provide ways for the state to promote transportation of goods, however the canals have become congested and are unable to efficiently use these water networks. The Government of Kerala wants to rehabilitate these transport systems and explore other ways water can be used. The state welcomes experts in water transport, coastal shipping and technology.

Waste Management

Waste management is a concern throughout India. In Kerala, the city of Thiruvananthapuram generates 310 tonnes of waste per day. With limited resources to handle this, and growing demands from the public, Government officials are interested in finding modern technologies to deal with waste management.

Power Generation

Due to water shortages, the region depends on rain for power. So there is a great need for alternative sources of energy. The state is currently running on hydroelectric power, with an aim to double power generation capacity in the coming years.

Accessing opportunities in Kerala

Kerala is ensuring they make the state an attractive environment for new investment. Furthermore, it wishes to attract Keralite talent that has migrated elsewhere to return to the state.

These development plans will need expertise in a range of areas. The UK will particularly be well placed to provide support in the following areas with regards to urban development:

• Technical assistance
• Private sector inputs
• Policy advice (especially PPP/PFI)
• Skills development
• Expertise on contracts, financing and project management consultancy
• Power generation

A good way to access opportunities in India is through trade missions such as the recent Built Environment Mission, as they provide strong platforms to make primary contacts in government and private sectors in both India and the UK.

State entities involved in Infrastructure planning in Kerala

The Kerala State Industrial Development Corporation

KSIDC is the government agency for industrial and investment promotion in Kerala in which promotes and finances large and medium scale developments. This agency is also trying to upgrade skills in order to staff the region’s many industrial parks (electronics, ICT, textiles and biotech). KSIDC also promotes infrastructure projects such as the NIMZ, and airport and life science parks and Health city.

Kerala Public Works Department

http://www.keralapwd.gov.in/index.php

Provides infrastructure support for development in the state. This entity works with upgradation and maintenance plans of highways and roads, including the State Road Improvement programme which is worth approximately $70 million.