THIRUVANANTHAPURAM: Kerala Infrastructure Investment Fund Board, an alternative fund-raising mechanism constituted to bring in Rs 50,000 crore capital investment to the state in five years, will make its first payment to contractors on August 14. The first set of payments, not more than Rs 500 crore, will be made to the contractors who have taken up KIIFB-approved projects under the Education Department, the Railway and the Health Department. The payment will be done online, through the Direct Payments System that will be launched by finance minister Dr T.M. Thomas Isaac on the day.
The unique aspect about the payment is that, unlike usual government payments to contractors, it would be paid as and when the work is completed. In short, contractors will not have to “be in the queue” for months and years on end. “Each contractor will have to submit a work breakdown structure, a time table, with physical and financial milestones,” a KIIFB fund manager said. “As and when a milestone is completed, the contractor will have to submit an invoice to the special purpose vehicle created by the concerned department. Once the SPV uploads the invoice, KIIFB will transfer the money directly to the contractor through the electronic payment route,” the manager said. If there is a need, KIIFB’s technical wing will verify the completed work and suggest corrections.
The Education Department projects, for which IT@School is the SPV, relate to the creation of hi-tech classrooms. The money will be transferred to BSNL, which has been picked to digitize classrooms. The Health Department works, carried out through its SPV Kerala Medical Services Corporation Limited, include the installation of cathlabs and ancillary equipments in medical and general hospitals. WiproGE, which had won the tender, will be the recipient.
The third work is the construction of the railway overbridge at Akathethara in Malampuzha, done by PWD. However, the Railway does not accept online transfer. Therefore, the money will be handed over a demand draft. Transparency and quick money transfer is expected to reduce tender amounts. “This will trigger competition among contractors to get a KIIFB work, which eventually will bring down quotes,” a top Finance Department official said. Results have already begun to show. The tender for the Ambalappuzha-Thiruvalla road, for instance, has been fixed for at least Rs 10 lakh below estimate.
