The Hindu Business Line : Kerala industrial units fall victim to environmental activism

ENVIRONMENTAL activism and public litigations under the banner of protection of the environment seem to have become a bane on the industrial growth of the State.

Several industrial units have faced the brunt of it, while some others could not take off. Some units had to abandon their expansion programmes.

One of the worst hit is the ailing Fertilisers and Chemicals Travancore Ltd (FACT). The company, which had been importing ammonia and storing it in its ammonia tank in the Wellington Island, had to close the tank on an order from the Kerala High Court on a public interest petition in 1994. This has forced the company, providing direct employment to about 10,000 and indirect to around 40,000 people then, to put up a new ammonia plant costing around Rs 700 crore.

High interest burden at 15.5 per cent and depreciation had made the product to cost Rs 14,000 - Rs 15,000 when the imported ammonia was costing only around $100 (about Rs 4,400). Consequently, the company, which had made a net profit of around Rs 79 crore in 1994-95 from an annual turnover of Rs 1,800 crore, started making losses and that was around Rs 200 crore at present, industry sources told Business Line.

High ammonia cost from its own plant had made the company's urea plant at the Cochin division unviable leading to its closure early last year. This has caused a drop of Rs 400 crore in its total turnover.

Now, the Supreme Court, had cleared the case on an appeal by the FACT last month in its favour, allowing the company to use it for storing ammonia. But, the ills of the past over nine years had pushed the company into the BIFR net. Those filed the PIL are reticent now on the issue, they said. The fertiliser pricing policy also contributed to the poor financial performance, the sources added.

A proposal to grant rights for mining of mineral sand from the southern coast of the State to the private sector had to be dropped following stiff opposition from the environmentalists, the sources said. The project could have been taken up had the authorities took a pragmatic approach in this matter. The Government should have allowed the mining in a regulated and scientific manner by addressing the environmental impact reasonably, they said.

Similarly, the closure of Mavoor Rayons, which was functioning in the State since 1960, had to pull down its shutters on environmental issues. But this could have also been avoided had the environmental concerns were considered and technology improved, they pointed out.

Following the detection of environmental pollution, the Philips Carbon Black Ltd at nearby Karimugal had switched over to latest technology by investing over Rs 7 crore and solved the problem. But, when the so-called environmental activists continued with their agitation even after the modernisation, the company had dropped the expansion of its unit here.

In the case of Plachimada Coco-Cola issue, such a situation would not have arisen had the authorities, while granting the permission to draw water, made it clear on the quantum of water could be drawn. The unlimited drawing of underground water coupled with the present drought conditions forced the company to close the unit. In fact, those granted the licence had no idea about the ground water availability in the area, they said.

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