Report of the Seminar on
Promoting Industrial Development in Nagapattinam District
12 March 2008

The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the Federation of Indian Chambers of Commerce and Industry (FICCI), Tamil Nadu State Council, organized a Seminar on Promoting Industrial Development in Nagapattinam District on Wednesday, the 12th March 2008 at Nagapattinam. Almost 70 persons representing Government department, Trade & Industries, Chambers of Commerce, NGOs, Self Help Groups and Media are participated (See attached list of participants).

Opening Session

Mr Tenkasi S. Jawahar, IAS, Collector, Nagapattinam District explained the tremendous scope for starting industries in the district, including tourism development and developing the Point Claimere bird sanctuary. In addition, he stated that the Broad Gauge rail link between Tiruvarur and Nagore and the Nagapattinam port works were progressing. Besides, steps are being taken to establish a green field airport and also a 2000-mw thermal power plant in the district in the near future.

Mr C. V. Sankar, IAS, Officer on Special Duty (Relief and Rehabilitation), Disaster Management and Mitigation Department, Government of Tamil Nadu said that entrepreneur spirit was essential and people should take calculated risks. He also pointed out that there is a good potential for industrial development in the district and critical areas should be given focused attention. The need to rope in departments like tourism, agriculture, fisheries, etc. for starting new ventures was stressed by him.

Mr P Murari, Advisor to the President, FICCI said that FICCI is in the forefront in the field of industrial development and would extend all assistance to the entrepreneurs for starting industries in the district. He said that considering the importance of exporting vegetables and fruits, FICCI is arranging special training on Good Agricultural Practices and one such training has already been started in Trichy district. He assumed that FICCI would help the district administration for starting such trainings on Good Agricultural Practices in Nagapattinam district.

Mr Miguel Perez-Ludena, the Economic Affairs Officer, Poverty and Development Division, UNESCAP stressed the need for special initiatives for starting industries in the district by discussing with the experts concerned. He stressed the need to study seriously the utility of the projects proposed. He wanted to hear the views of the people.

Dr A M Swaminathan, IAS (Retd.), Former Finance Secretary, Government of Tamil Nadu submitted the first draft of the report being authorized by him. He said that there are many challenges including power supply, transport, and availability of raw materials for starting major industries in Nagapattinam district. He suggested that medium and small industries including biomass based power plants, seaweed farming, making compressed mud earth blocks, dairying, poultry farming and fruits and vegetables processing units, rural BPOs, marine-based units should be started without much difficulty.

Summary of Discussions

Mr R. Ramamurthy, Convenor of CSR Panel, FICCI-TNSC, Mr S. Ranganathan, general secretary of Cauvery Delta Farmers Welfare Association, Mr Kalaivanan, Senior Manager, Cauvery Basin Refineries, Mr R. Sundaram, Chartered Accountant from Madurai, Mr K. Venugopal, Assistant General Manager, NABARD and Mr A. Thanikachalam, Lead District Manager, Indian Overseas Bank, Nagapattinam participated in the discussion during the forenoon session. The following points summarize some of the key issues discussed:

1. Poor transport infrastructure:
The district has no air connectivity since the nearest airport (Trichy) is 140 km away. At present the rail connectivity is very limited since the erstwhile meter gauge line is being converted to broad gauge. So everyone has to depend on costly road sector for transport of persons and goods. The port, which was severely damaged by the Tsunami, is being restored. Though all the villages and towns are electrified, power supply is not consistent or continues during summer. On the other hand, the rail, port and road connectivity of the district will greatly improved in the coming.

2. Some infrastructure not put to use:
Because of non-availability of local Crude, the Cauvery basin Refinery is working only to 30% to 50% of its capacity. Because of absence of allotment of Andhra Crude, the special jetty is idle. The port can handle more tonnages after the current restoration work is over. But more large barges are necessary to reduce his ships waiting time and to make the operations viable. The new fish auction hall constructed by METRO is locked up for more than a year due to local politics.
The cold storage for fish are idle because of lack of back up power supply, transport bottlenecks, local community issues etc.

3. Lack of entrepreneurship:
Having been agriculture-based rural society all these years, the local people are not very entrepreneurial. They expect the government to do everything for them. Training and hand holding support by Government are needed.

4. Availability of skilled labour:
On the plus side, thanks to high level of literacy and also training imparted by ITIs, and polytechnics, the availability of skilled labour is good. At present, due to lack of local opportunities they are migrating to other districts.

5. Issues with the government:
Though the state government single window system is reported to be in operation, getting all the approvals from different department takes a very long time. According to the district small-scale industries association, a new unit still requires 17 clearance from various government, municipal and panjayath agencies.

6. Banking finance:
There were complains from several participants about non-availability of banking finance for projects. This was confirmed with the figures that show how the lending/deposit ratio in the district is unusually low, with specially low lending volumes outside agriculture. Representatives from the banks argued on their turn that proposals are submitted with incomplete or incorrect data, without doing a proper analysis or are overoptimistic about the ROI.

Afternoon Session

In the afternoon session five specific proposals (Small Power Plant, Seaweed Farming, Compressed Mud Blocks, Rural BPOs and Tourism) were discussed in detail by prospective entrepreneurs, Government Officials and NGOs. Next there was a general discussion on the prospects of new industries in infrastructure, dairying and fisheries sectors. Proposals pending with financial institutions were also connected upon. These proposals are reported to in a separate document.