Delhi liquor scam ‘link’ to Palakkad water crisis: Why Vijayan govt is drawing fire over a distillery

Last week, the Pinarayi Vijayan Cabinet gave permission to Oasis Commercial Private Ltd to set up an ethanol plant, multi-feed distillation unit, IMFL bottling plant, brewery, malt spirit plant and brandy/winery in phases at Palakkad’s Kanchikode.

The Opposition alleged that the Enforcement Directorate (ED) had arrested the Oasis Commercial owner in connection with alleged irregularities in the Delhi excise policy case in 2023.

On Monday, the Congress and the BJP took out separate marches to the site of the proposed plant in Elappully village in Palakkad district, charging that it would aggravate the existing scarcity of water in the belt. The plant would come up along the banks of a water body, where a PepsiCo bottling plant was closed down in 2020 due to various issues including labour unrest and water shortage.

A Coke soft drink plant was also shut in Palakkad in 2004 following protests against exploitation of groundwater and environmental pollution. The Elappully panchayat has been declared a critical zone by the state government’s groundwater department.

Although liquor sale is a major source of non-tax revenue of the cash-strapped Kerala government, no brewery/distillery has been sanctioned in the state for the last 25 years. Currently, state-owned BEVCO (Beverages Corporation), the sole agency for procuring and distributing IMFL in Kerala, is meeting its demands from distilleries from across the country.

However, the Vijayan regime, in its 2023 excise policy, decided to promote the manufacture of IMFL, including liquor and beer, within the state itself.

Senior Congress leader V D Satheesan, Leader of the Opposition in the state Assembly, alleged that the LDF government’s decision to clear the Palakkad distillery involved kickbacks. “The government should reveal on what grounds it had selected Oasis. The government has flouted all laid-down procedures with regard to the selection of the liquor firm. Why this firm alone was given the sanction. Oasis owner Gautam Malhotra had been arrested in connection with the Delhi liquor policy case. The firm had faced cases in Punjab for polluting water sources,’’ he alleged.

Brushing aside the Opposition’s allegations as “baseless”, the CPI(M) leader from Palakkad and Excise Minister, M B Rajesh, said: “Sanction for the brewery was given after looking at all relevant factors. The project is an investment, which does not require any tender process. Oasis firm had been shortlisted by the Central government for manufacturing ethanol. The Congress is against investment in Kerala. Our decision is transparent.”

Hitting back at Satheesan over his graft allegation, Rajesh said, “Such a thought is quite natural for a Congress leader.’’

BJP leader C Krishnakumar, who led a protest march to the proposed plant site, said Palakkad has been reeling under severe water shortage. “This distillery decision will be a major blow for irrigation and drinking water schemes. No factory which uses water as raw material should be allowed here. We want drinking water and irrigation to be given priority,’’ he said.

On Monday, the Congress-ruled Elappully panchayat passed a resolution against the proposed distillery, which was backed by the BJP members too.

Elappully panchayat president Revathi Babu said: “In a resolution, we have urged the government to review the decision. Considering the geography, climate and agricultural practices in our panchayat, we have taken a strong stand against the brewery.’’

The CPM, however, strongly justified the Vijayan government’s move, calling the Opposition’s protests “politically motivated”.

“There is political motive behind all these allegations. Those who raised corruption charges may have the support of the spirit lobby,” CPM state secretary M V Govindan alleged. He said over 10 crore litres of spirit are brought to the state by this lobby which, he said, would be adversely impacted if the proposed brewery unit is established.

Govindan also rejected concerns over water crisis as “unfounded”, saying the water collected through rainwater harvesting on a five-acre plot of land as part of the project would be used for it.

Attacking the Congress, he said it was “scared” to raise the matter in the Assembly during the current session. There are over 3,000 liquor distribution units in the Congress-ruled Karnataka as against Kerala’s 309 units, he added.

Currently, Kerala does not have any spirit manufacturing units, with its demand entirely met from such plants in other states. Kerala has only liquor bottling units.

Industry sources said that Oasis is planning to set up a grain-based spirit manufacturing unit as part of the proposed project in the first stage. This would reduce the dependence of Kerala’s bottling plants on other states for the supply of spirit.