World Bank describes KSTP as a 'problem project'

THIRUVANANTHAPURAM: The World Bank has categorized the Kerala State Transport Project (KSTP), the road project funded by it in the state, as a "problem project", as it was two years behind the original schedule and still far from achieving development objectives. The bank has also said that considering the current status of the project, it will not consider extending the loan closing date, which is at present April 30, 2019.

In a letter written to chief secretary Paul Antony on May 16, World Bank acting country director Hisham Abdo has pointed out that the project has disbursed only 43% of funds though 82% of the time has elapsed.

"The project management team has submitted the final governance improvement action plan, but it is yet to be fully implemented. As a result, the project continues to be categorised as problem project, and the implementation progress rating has been retained as moderately unsatisfactory," it said.

In the report prepared by the World Bank team that visited the state from April 11 to 18, critical issues in project implementation, including timely allocation of funds, ensuring compliance with the six-point action plan that was charted for speedy project implementation, resolving land issues (like in Iritty, Eranholli and Valavupara bridges, and Thiruvalla bypass) and expediting awards for balance contracts, have been highlighted.

The bank has also informed that it has received a request for extending the loan period for 14 more months beyond the current closing date, which is April 30 next year. "We will be unable to consider any extension to the closing date till the six-point action plan is fully implemented and the project ratings are upgraded," the letter said.

However, the government said that almost 90% of the work has been completed and that it will be completed by December this year itself, except two stretches. "The Punalur-Ponkunnam stretch, was originally designed to be developed on a public-private partnership (PPP) basis. But since no one expressed interest, it had to be revised to engineering, procurement and construction model. The bank has given its go ahead. Also, in the case of Thiruvalla bypass, the original contractor has left the project and is being replaced," principal secretary (public works) G Kamala Vardhana Rao said. He added that the state has been adhering to the time-limit and the six points that the bank has suggested.

On multiple instances, the bank had taken exception to the state's stand over the project. While it was reluctant to fund the phase-II of the project owing to poor completion of phase-I, it had last year threatened to cancel the remaining amount owing to poor utilisation of funds. It had also taken exception to PWD minister G Sudhakaran's statement that KSTP was one of the most corrupt projects in the state for which the World Bank was responsible.

The phase-II of the project envisages the upgradation of 363km of six major road stretches in the state, development of a model safe corridor of 80km and institutional strengthening of PWD. The total project cost has been estimated at $445 million out of which $216 million will be provided by the World Bank as loan.