Ruling party's bid to cash in on Kerala's tourism boom

Kerala is riding the wave of a tourism boom and the Communist Party of India (Marxist), which heads the ruling Left Democratic Front, is determined to hive off a piece of the cake.

A late entrant on the tourism circuit, the State got a boost when the National Geographic Traveler, commended it as a "must see" destination a few years ago. It now gets over 600,000 foreign tourists and more than 6 million domestic tourists.

Direct and indirect revenue from tourism, which was only around Rs 45 billion in 2001, shot up to Rs 114.33 billion last year. During this period, foreign exchange earnings through tourism rose from Rs 5.35 billion to Rs 26.41 billion.

The CPI (M) already controls several businesses in different fields such as the media, healthcare and manufacturing. Observers have estimated its corporate assets at between Rs 40 to 50 billion.

The oldest of its businesses is a newspaper, Deshabhimani, which was launched in the 1940s as the official organ of the undivided Communist Party of India. The story of a woman who gifted a lamb, which was her only asset, to start the newspaper is part of Communist lore. The biggest contribution to the newspaper's capital was made by EMS Namboodiripad, and he remained its owner until his death.

When there was a change of ownership in Asianet, the first Malayalam satellite channel, which the party viewed as a friendly medium, shortly before the Assembly elections of 2001, the CPI-M promoted a television company and launched the Kairali channel. The company, of which film star Mammootty is the chairman, attracted investments from many non-resident Keralites. It now runs three channels.

Both Deshabhimani and Kairali TV are now constructing multi-storeyed buildings in Thiruvananthapuram to house their corporate headquarters.

The CPI-M has considerable business experience in the cooperative sector. Cooperative societies under its control run multi-specialty hospitals at Kochi, Thalassery and Perinthalmanna. The party also runs a self-financing nursing college at Thalassery.

The cooperative sector offers the party certain advantages. Even before venturing into commercial enterprises, it had been associated with workers' cooperatives. By virtue of its control over cooperative banks and cooperative societies which are flush with funds, the party can easily raise capital for cooperative ventures.

When the party decided to enter the expanding tourism and hospitality industry, it first formed a cooperative society, styled as the Malabar Tourism Development Co-operative Ltd (MTDC). However, since the cooperative society is not a good mechanism for attracting investments from NRKs, it also registered a joint stock company, named the Malabar Pleasures (India) Pvt Ltd.

Under the arrangement worked out by the party, the cooperative society sets up tourism and hospitality units and the company runs them.

The first unit of MTDC, the Vismaya water park was inaugurated at Parassinikadavu in Kannur district on August 31. Apparently the party has drawn inspiration from Kochouseph Chittilappilly, the founder of the V-Guard group of companies, who set up the Veegaland amusement park near Kochi. It reportedly attracts about one million visitors a year.

Last month, even as the Kannur project was taking concrete shape, the party promoted another cooperative society to build a five-star hotel at Kozhikode. Another tourism project, located at Mannarkkad in Palakkad district, is reported to be "at an infancy stage".

The party controls its expanding business empire by placing trusted leaders in key positions. When MTDC was set up, party central committee member EP Jayarajan, who is the general manager of the Deshabhimani group, was named chairman. Kannur district panchayat president KK Narayanan replaced him later.

Two ministers, district committee secretary TP Ramakrishnan and Mayor M. Bhaskaran have been named members of the governing body of the Kozhikode society.

Information provided by MTDC at its website indicates how the party mobilizes resources for business ventures. Membership of MTDC, set up with an authorized capital of Rs 200 million, is open to individuals, cooperative institutions, local self-governments and government establishments.

Membership fee is Rs 10 for all categories. Individual members must hold at least one share of Rs 500 and institutions shares worth at least Rs 10,000. The maximum permitted holding is five per cent of the authorized capital.

MTDC has justified the water park by arguing that Keralites are today open to new avenues of leisure and recreations and such projects have ample potential. Party veterans may not buy such arguments but young cadres will have no problem with them. --Gulf Today, Sharjah, September 8, 2008.