Now, KIIFB to focus more on project implementation

Thiruvananthapuram: The Kerala Infrastructure Investment Fund Board (KIIFB) that was showcased by the LDF government as a prestigious and effective solution for the state’s infrastructure woes, is set to change its focus as the government steps into its second innings.
According to highly-placed government sources, KIIFB, which cleared various proposals on a war footing with 903 projects cleared under its belt, would now slow down with regard to taking up more projects. Instead, it would focus on the implementation of those in the pipeline, after weeding out the non-starter ones. “Yes, there is some thinking along those lines. Also, its large portfolio means KIIFB needs to consolidate and focus on implementation hereafter. Better and faster implementation is in any case the crux of the state’s challenge in increasing its capital expenditure,” a top official said.
The agency has begun the process of weeding out those which have not yet taken off, despite the administrative clearance. “There will also be non-starter projects which will have to be dropped, thus providing room for a limited number of new projects. In fact, a list of such projects is being prepared,” sources added.
KIIFB has so far approved 903 projects with an outlay of Rs 63,224.4 crore. These projects comprise both physical and social infrastructure across a range of sectors, including hospitals and health centres, schools and colleges, roads and bridges, water supply and sanitation, electricity and communication networks, industrial parks, cultural complexes, etc. Of these, 488 projects worth Rs 21,309.7 crore have been tendered and 27 projects worth Rs 732 crore and 160 project components worth Rs 560.3 crore have been commissioned.
The agency — its creation and role in borrowing funds from the market— has been a serious bone of contention between Centre and the state government in its previous tenure, including during the recently-concluded assembly elections.
The tensions between Centre and the state over KIIFB had reached such a boiling point that comptroller & auditor general (CAG) had flagged KIIFB’s mode of raising funds from the overseas market, and Enforcement Directorate (ED) had registered a case against KIIFB citing violation of foreign exchange management act (Fema) while raising money through masala bonds from abroad.
In addition to Rs 2,150 crore that was raised through masala bonds at an interest rate of 9.7%, KIIFB had also availed long-term loans from Nabard (Rs 565 crore at 9.3%), State Bank of India (Rs 1,000 crore at 9.15%), Indian Bank (Rs 500 crore at 9.15%) and Union Bank of India (Rs 500 crore at 8.95%). All these loans were secured for 10 years and 12 years with a repayment period moratorium of two years.
As per the KIIFB (amendment) act, 2016, the government set apart 10% of motor vehicle tax in 2016-17, increasing it by 10% every year until it reaches 50% in the fifth year. The cess levied on petrol and diesel is also to be given to KIIFB, before December 31 every year and paid on an escrow basis from the state treasury to KIIFB accounts automatically.