Chief Minister’s Appeal to the Defence Ministry
Invest Rs. 1500 crore in the II phase of BrahMos

Handing over Kerala Hitech Industries Ltd (KELTEC) to BrahMos Aerospace Ltd Thiruvananthapuram by presenting a huge symbolic key to Defence Minister A.K. Antony at Thiruvananthapuram on December 31, Chief Minister V.S. Achuthanandan called for an investment of Rs. 1500 crores in the second phase for the expansion of the unit. Although (KELTEC) could achieve remarkable strides in technical excellence high interest burden on capital investment had put unbearable financial burden. The company was referred to the Board Industrial and Financial Reconstruction in 1999 by the LDF Government of the time. As per a revival package the State Government gave Rs. 7.6 crores to the company and advance payments of Rs. 10 crores each from ISRO and DRDO were received for products to be delivered in five years. The company was making a remarkable turnaround in terms of order position, profit and technological capabilities. But in the meantime, the UDF which came to power in 2001 decided for a sell out of the company to the private sector and advertisements were given to that effect. Fortunately the move did not materialise.

However, the company’s survival was at stake in the long run unless it was able to update technology and add sufficient manpower in the face of intense competition from aerospace industry. The modernisation and expansion of such a high-end hardware industry was bound to involve huge capital investments, which the State Government was finding hard to mobilise. At this time the new LDF Government came forward with a proactive policy of seeking to revive some key industrial units in the State by tying them up with central PSUs. Accordingly the State proposed to hand over the company to the Ministry of Defence. Defence Minister A.K. Antony now supported the State Government initiative. Accordingly a comprehensive proposal was then prepared for the takeover.

The Kerala Hitech industries Ltd was thus rechristened as BrahMos Aerospace Ltd on December 31, 2007. BrahMos which has its headquarters in Delhi will make an investment of Rs. 125 crores in the first phase. BrahMos is planning to set up State-of-the art facilities for the full-assembling and testing of supersonic cruise missiles at the unit here. Further expansion and developments of the BrahMos Thiruvananthapuram Ltd have to come in the second phase for which the Chief Minister has called for an additional investment of Rs. 1500 crores by the Defence Ministry.