The Hindu Business Line : BMW dashes Kerala's hopes, prefers TN

So, after many rounds of discussions, site visits and evaluations by BMW that raised Kerala's expectations of bagging its most prestigious investment yet, the reality has dawned on the State that at last BMW is setting up its plant at Chingleput in Tamil Nadu.

Multiple visits by BMW teams to the State to hold discussions with officials and inspect sites had given rise to intense speculation that the company would choose Kerala to be its base in India. The Government had offered a 25-acre plot at Kalamassery on the outskirts of Kochi to set up the assembling plant.

The wishful thinking then was that Kerala's high social development indices, educated populace, presence of the Kochi port and absence of any other automobile unit in the State would give it an edge over others.

Although it is investing only a tiny $40 million in the wholly-owned subsidiary that will assemble imported completely knocked down (CKD) kits, had BMW chosen Kerala for the unit, it would have given a tremendous boost to Kerala's image and the State's efforts to attract investment.

This is the second consecutive time Kerala is losing out to Tamil Nadu in the race for a major foreign investment. Earlier, world's largest mobile phone maker, Nokia, had also considered Kerala for setting up its manufacturing unit but eventually opted for Chennai.

The Smart City project, envisaging an investment of 1,500 crore, is now hanging fire as the State Government has not gone ahead with it in the face of allegations of corruption in the land deal by the Opposition.

Industry chambers in the State lashed out at the State Government for letting such opportunities go. "All this is happening due to the weak political will in our State," said Mr C.P. Jain, President of the Kerala Chamber of Commerce and Industry.

The political parties in the State should set aside their difference of opinion and strive together to attract investment into the State. "It calls for a change of mindset and attitude," Mr Jain said, adding that industry is also concerned about fluctuating policies adopted by various ruling coalitions.

According to an official of Confederation of Indian Industry (CII) Kerala division, the State still lacks an aggressive investment attracting policy vis-à-vis its neighbours such as Tamil Nadu and Karnataka. "If we lose such a project, we simply forget about it and do nothing afterwards," he said.

Though many other States make it a point to attend international events such as the World Economic Forum where investors discuss their potential investment, Kerala has stayed away so far. "Till date, nobody from Kerala has participated in the WEF," he said.

Also, the industry-government participation is very less in the State when it comes to organising events to woo investment. "Still the industrial department does such events without involving the industry," he said.

The incidence of frequent hartals is another issue that hampers the prospects of the State. In fact, when the BMW team visited Kerala, it turned out to be a hartal day.

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