India Business
Munnar demolitions: will it harm Kerala tourism?
May 21, 2007 - 4:13:31 PM

Thiruvananthapuram, May 21 - In the last one week, more than two dozen illegal tourist resorts in the picturesque hill station of Munnar have been razed and 200 more are to be demolished for encroaching on government land, but tourism industry watchers say the move could harm Kerala's booming tourism industry.

The demolition drive, by the no-nonsense Chief Minister V.S. Achuthanandan, was launched to evict all those who had encroached on government land.

'The drive would be extended to other parts of the state like Kovalam and Kumarakom. We will under no circumstances be lenient on these encroachers,' Achuthanandan declared.

But tourism watchers say the drive has come at a time when the state is anyway short of 10,000 rooms during the peak tourist season - October to March - and would result in millions of rupees in tourism investment going down the drain.

However, state Tourism Minister Kodiyeri Balakrishnan Monday said that the demolition drive would not affect the state's tourism industry.

'After the demolition of all encroached lands is completed, we will prepare an environmental-friendly master plan for Munnar in four months. The chief minister has agreed to give a portion of land to the tourism department and we plan to construct budget hotels on it,' Balakrishnan told reporters in Munnar.

He said a crime branch probe would be held into the land mafia activities in the tourist resort.

For investment-starved Kerala, tourism is the one sector where small and big investors have flocked in large numbers and has seen around Rs.10 billion investment in the last decade. And figures show that this has yielded results.

In 2006, the number of foreign tourists visiting Kerala went up by 23.67 percent over 2005 and touched a record 428,534. In the same year, as many as 6.2 million domestic visitors arrived in the state - up 5.41 percent from the previous year.

Munnar, a small tourist destination in Idukki district, has more than 3,500 small and big resorts and several wayside small hotels and restaurants.

Suresh Kumar, chief of the special team engaged in the demolition, said: 'There are around 3,000 buildings which have to be razed in Munnar because of encroachments. We are doing the job that has been entrusted to us.'

After the demolitions began last week, anxious resort owners approached the courts to get the move stayed. Even the apex court has ruled in favour of Achuthanandan. The demolition team is giving the targeted building and resort owners just 24 hours notice before bringing the bulldozers.

K. Sudish Kumar, who owns a premier resort in Kovalam beach, said the chief minister was 'playing to the gallery' in his haste to get on with the demolitions, ignoring the growth of the money-spinning tourism industry.

'Even the courts have ruled in favour of the government, so why this undue haste? The government should put up notices with regard to the encroachments, showing the areas that have been encroached upon. Most of the targeted owners have invested without knowing that they were being duped. This certainly does not augur well,' Kumar told IANS.

A case in point is of a leading resort owner in Munnar who has been handed a demolition notice for building on encroached land. The businessman had been holding the title deed of the land for the past 16 years and recently built a plush resort on it.

According to a source close to the owner, he built the resort after taking a loan from the state-owned Kerala Financial Corporation and the loan was given after all the land ownership documents were vetted.

'Now he has been served a notice. If the land title was doubtful, how come the state agency extended finances to build the resort,' said the source on condition of anonymity.

According to reports, the banking sector too is in real trouble. The week of demolitions in Munnar has seen the banks lose more than Rs.2 billion because in all the cases, the owners had hypothecated the property against the loan. So now the illegal properties belong to the government.

'In most cases, permission and sanction to build on the land was given by the government authorities. In some cases, MoUs were inked with government officials for investment. After asking investors to invest in tourism projects, the government is turning its back on them,' said an investor who did not wish to be named.

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