KERALA HOPES FOR OAK RIDGE NATIONAL LABORATORY INVESTMENT

UNCLAS CHENNAI 000303

SIPDIS

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: EINV ETRD ETTC PGOV IN
SUBJECT: KERALA HOPES FOR OAK RIDGE NATIONAL LABORATORY INVESTMENT


REFS: (A) 06 CHENNAI 0109 (B) 05 CHENNAI 2087


1. (SBU) SUMMARY: Kerala government officials hope the U.S.
Department of Energy's Oak Ridge National Laboratories will set up a
research and development facility in the state capital,
Thiruvananthapuram (also known as Trivandrum). According to state
government sources, Kerala is awaiting a formal request from Oak
Ridge for 15 acres of land in Thiruvananthapuram's Technocity
development. Despite ongoing discussions, Kerala officials are
haunted by the fear that the U.S. government might block the
investment because of problems encountered in the state by other
U.S. investors, specifically Coca Cola and Pepsi. END SUMMARY


2. (SBU) Technopark is a 150-acre information technology park
developed by the government of Kerala. The park, located in
Thiruvananthapuram, has been operational since 1994. Technocity is
a planned five-hundred acre expansion of Technopark. In December
2006, Oak Ridge National Laboratories Director Jeffrey Wadsworth
signed a Memorandum of Understanding with Technopark setting up a
Technology Collaboration Council to explore possible areas of common
research interest with the companies based in Technopark. Kerala
Information Technology Special Secretary Jyothilal (Protect) told
post that Oak Ridge is considering a much more serious commitment to
Kerala: establishing a research and development facility in
Technocity. According to Jyothilal, Kerala is awaiting a formal
request from Oak Ridge for 15 acres of land in the Technocity
project.


3. (SBU) Chairman and Managing Director of IBS Software Services,
V.K. Mathews, was the industry lead in hosting Director Wadsworth
and the team from Oak Ridge during the December 2006 visit. Mathews
told post that landing Oak Ridge National Laboratories would be a
huge boost to Technocity and, more importantly, for Kerala's overall
information technology sector. He feels that Technocity would
provide the ideal fit for Oak Ridge's research and development and
computation needs. Mathews said that "Oak Ridge is now holding
internal discussions on the appropriate destination."

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FEARS THAT PAST DISPUTES MIGHT BLOCK THE INVESTMENT
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4. (SBU) Both Jyothilal and Mathews expressed apprehensions that the
U.S. government might not allow Oak Ridge to invest in Kerala.
Jyothilal said he has heard rumors that the U.S. government is
discouraging companies from investing in Kerala in light of the
troubles Coca Cola and Pepsi have faced in Kerala (reftels).
Mathews said he has counseled two Ministers in the government of
Kerala to take a more pragmatic policy with regard to Coca Cola and
Pepsi. He hopes that doing so will help improve the chances of Oak
Ridge setting up shop in Technocity.


5. (SBU) COMMENT: Kerala officials are understandably eager to reel
in as prestigious a research institution as Oak Ridge National
Laboratories. Jyothilal and Mathews' concern over how Kerala's past
problems with U.S. investors might impact the Technopark bid for Oak
Ridge indicates that at least some in Kerala see the need to shake
the state's historic perception of being hostile to foreign
investment. That said, it is hard to imagine that the
dyed-in-the-wool leaders of the Communist Party of India (Marxist),
which now heads the state government, will make the dramatic policy
changes needed to get Kerala on par with the rest of India's
investor-friendly southern states. END COMMENT.


6. This message was coordinated with Embassy New Delhi.

HOPPER