Kerala moves to acquire 300 acres for industrial development near Vizhinjam Port
THIRUVANANTHAPURAM : The state government has identified 300 acres of privately owned land for industrial development in connection with the Vizhinjam International Port. Spread across five locations within a 20-kilometre radius of the port, the land has been earmarked through KINFRA. Discussions with landowners are expected to begin soon, with the government planning to acquire the property by offering compensation.
As this acquisition move comes more than a decade after construction of the port began, the government will now have to pay a steep price for the land. Acting on KINFRA’s recommendation to purchase 50 acres in the first phase, the Revenue Department has already started site inspections and initiated the process of assessing land value.
The government has also announced plans to develop the stretch from Vizhinjam to Kazhakkoottam as a logistics corridor. However, several companies that had shown interest in setting up industrial units in the region pulled back due to the lack of available land. Although a draft logistics policy for the state was prepared a year ago, it is still awaiting final approval.
During the Global Investors Meet organised by the Department of Industries in Kochi this January, Sharaf Group, a shipping and logistics company, proposed an investment of ₹5,000 crore in Vizhinjam. The group also expressed willingness to purchase the 50 acres required for the first phase of its project. But the Industries Department could not identify suitable land for acquisition. Similarly, proposals from a few other companies to establish logistics parks also stalled due to land shortage.
Given the current circumstances, the state can reap the full benefits of the International Port project only by simultaneously launching allied industrial units. Of the project’s first phase worth ₹8,867 crore, the state government has invested ₹4,777.14 crore. While the Adani Group, which operates the port, has earned ₹384 crore as user fees from October 2024 till now, the government has received less than ₹40 crore in GST share so far. The state will begin receiving its share of revenue from container movement only from 2034.
Additional incentives for logistics parks
To encourage logistics infrastructure, the government has proposed additional capital assistance of up to ₹7 crore for logistics parks. The draft logistics policy recommends that this amount be granted over and above the ₹2 crore capital incentive already available to Micro, Small and Medium Enterprises (MSMEs) under the industrial policy.
Under the proposed framework, a project with a total area of 10 acres or more will be classified as a logistics park, while those with five acres will be considered mini-logistics parks. For the latter, the draft suggests a maximum capital incentive of up to ₹3 crore. Parks can be developed either on private land or on land acquired by the government under a Public-Private Partnership (PPP) model. The draft logistics policy is expected to be announced next month.