KIIFB Under Fire: How Kerala's "White Elephant" Pushed State Into Debt Crisis

His statement comes on a day when the Pinarayi Vijayan-led Left government has given full-page advertisements on how they have re-shaped Kerala through this project, as it celebrates its silver jubilee.

Incidentally, it was during the tenure of economist-turned-then State Finance Minister Thomas Issac (2006-11) that KIIFB was given a makeover, and during his tenure and since Vijayan took over in 2016, it was given further thrust. The Congress party, however, has been criticising it.

Philip alleged that KIIFB’s income and expenditure accounts have neither been audited nor presented before the state Assembly on time, raising serious questions about transparency and accountability.

“KIIFB, which has pushed Kerala into massive debt, is riddled with irregularities. Its financial dealings through Special Purpose Vehicles (SPVs) and contract arrangements remain hidden behind an iron curtain,” he said.

He further demanded that the government disclose the debt KIIFB has actually incurred and how it plans to repay it, even as it claims to have implemented development projects worth Rs 90,562 crore.

“The fuel tax and motor vehicle tax, which should go to the public exchequer, are being diverted to the KIIFB fund,” Philip alleged.

Criticising the government’s decision to raise funds through Masala Bonds on the London Stock Exchange, Philip said the move violated foreign exchange regulations.

“Despite this, no action was taken. KIIFB has raised huge sums through various bonds and loans from financial institutions like NABARD, for which the state will have to pay more than nine per cent interest,” he said.

Calling it a reckless fiscal approach, Philip accused the ruling dispensation of pushing the repayment burden onto future governments.

“None of KIIFB’s projects are revenue-generating. Borrowing in the name of development and spending without returns is like pouring water into the sea,” he remarked.

Philip pointed out that several reports of the Comptroller and Auditor General (CAG) have criticised KIIFB for mismanagement and for operating outside the purview of the state budget.

“Instead of addressing these findings, the government responded by passing a resolution in the Assembly to defend the agency,” he added.

“KIIFB has become a parallel structure of borrowing and expenditure, unaccountable to the legislature or the people,” said Philip.

- IANS