Kerala cabinet today favoured the proposed railway coach factory at Palakkad to be set up in the public sector.

In case the centre plans to set up the factory as a joint venture, the value of land should be considered as the equity share of the state, chief minister V S Achuthanandan told reporters after the cabinet meeting here.

He also said it had been decided to constitute a Kerala State Forest Development Agency with an objective to preserve and protect the bio-diversity of forests in the state.

A committee headed by state principal conservator of forests P M Manoharan had been constituted to recommed ways for modernising the forest department and asked to submit its reprot in next three months, Achuthanandan said.