A scenario where user fee is collected on Kerala Infrastructure Investment Fund Board (KIIFB)-funded roads will enable KIIFB to use it as a revenue source to repay its loans and, over time, phase out government grants, Chief Minister Pinarayi Vijayan said on Wednesday.
Strongly defending the KIIFB model during the budget discussion in the State Legislative Assembly, Mr. Vijayan said that the Centre’s discriminatory approach to KIIFB had prompted the State government to, “in principle,” explore revenue-generating models for it. The Centre’s arguments can be effectively countered if KIIFB projects generate revenue. In such a situation, KIIFB loans can also be excluded from the State’s borrowing limit, Mr. Vijayan said.
The Chief Minister said that the KIIFB will successfully complete its mission notwithstanding attempts to impede it with “half-truths and baseless allegations.” KIIFB is able to maintain an excellent credit rating because it repays loans promptly and in a time-bound manner, he added.
He described the infrastructure development realised through KIIFB during the past eight-and-a-half years as “matchless.” Mr. Vijayan went on to call it a “novel and courageous step in the State’s history and an alternative development model.” KIIFB has so far cleared 1147 projects worth a total ₹87,521.36 crore.
Kerala had moved the Supreme Court under Article 131 of the Constitution after letters to the Prime Minister and the Union Finance Minister seeking their intervention to exclude KIIFB loans from the State’s borrowings proved futile. The Central government’s argument that KIIFB is not revenue-generating unlike Central agencies like the National Highway Authority of India (NHAI) is baseless, the Chief Minister said. Though NHAI collects toll, it accounts for only a small portion of its repayments. For that, NHAI depends on open market borrowings and Central grants, Mr. Vijayan said.
An earlier statement by former Finance Minister T.M. Thomas Isaac that KIIFB will not entail toll/user fee was made at a time when fund raising by KIIFB was not treated as falling under the ambit of the State’s borrowings, Mr. Vijayan said. By including borrowings by KIIFB and similar institutions in the State’s borrowing limit, In 2022 alone Kerala lost the right to ₹15,895.50 crore by way of additional borrowing, and, between 2016 and 2023, ₹1,07,513.09 crore by way of resource loss.
While it is a fact that petroleum cess and a portion of the motor vehicle tax go as grant to KIIFB, the loans availed by KIIFB on its own remain its liability, Mr. Vijayan said.
On the Opposition UDF charges concerning the plan fund cuts announced by the LDF government, Mr. Vijayan said that the capital expenditure through KIIFB (₹17,857 crore) alone in the past three years was much higher than the spending by the Oommen Chandy government in its last three years (₹16,049 crore). The total capital expenditure of the LDF government and KIIFB in the past three years was ₹59,630 crore, the Chief Minister said.
