KIIFB makes an impressive start

Thiruvananthapuram: Kerala Infrastructure Investment Board (KIIFB), the LDF Government’s biggest gamble, is both a rebellion and a revolution. Rebellion because it is for the first time a state is attempting in such a big way to break out of the fiscal restrictions imposed by the Centre. Revolution because KIIFB will employ unorthodox funding methods to bring in an unheard of capital investment of Rs 50,000 crore to the state in five years.

The target looks imposing but KIIFB, given the untested nature of the experiment, has been off to a commendable start. In the six months since the first meeting of KIIF-B on November 7, 2016, 55 projects worth Rs 4000 crore have been approved for funding. Considering the one-year gestation period (conception to implementation) of one year for even Rs 50 lakh projects, the grant of technical sanction for 55 projects, with an average project cost of Rs 72 crore, within six months looks promising.

The 55 approved projects, dominated by water supply and PWD schemes, are in various stages of implementation like land acquisition, technical clearance and tendering. For instance, the tender process for the installation of cathlabs in Kozhikode and Thiruvananthapuram medical colleges has been completed. The successful bidder, WiproGE Healthcare, has been asked to submit the blueprint for the installation of cathlab and ancillary equipments.  

At the moment, KII-B has Rs 1643 crore (from motor vehicle tax and petrol cess) in its kitty. It has also taken Rs 2000 crore from NABARD Infrastructure Development Assistance. During 2017-18, KIIF-B estimates an investment of only Rs 5000 crore. The remaining funds for the fiscal will be made up by ‘Pravasi Chitty’, which will be launched by KSFE in August, and also by floating land bonds. The target is to get the chitty subscribed at least by one lakh NRIs in the first year.

KIIFB has also put in place a rigorous filtering mechanism. The 55 projects were picked up from the 177 that came before KIIF-B for consideration during this period. The project appraisal team of KIIF-B green-lights only those projects that had a flawless detailed project report, cost-benefit analysis and ‘worst-case scenario’ analysis.

In fact, 53 more projects were approved but on the condition that the special purpose vehicles comply with the issues raised by KIIFB. One of them incidentally is a '108-crore canal project, the only project submitted from finance minister Dr Thomas Isaac’s constituency.

The project appraisal committee has deferred 31 projects that, according to KIIF-B sources, “required enhanced level of details to acquire more clarity”.

However, not all projects announced in even the last year’s budget have been taken up by departments. “KIIFB is arranging secretary-level meetings to get these projects off the ground,” the source said.