Addressing the Assembly during discussions on supplementary budgetary demands, Satheesan accused the previous Left Democratic Front government of allowing KIIFB to accumulate unsustainable debt through expensive borrowing, questionable investments and financial decisions taken without adequate government oversight.
The Chief Minister said KIIFB had borrowed money at interest rates considerably higher than those available to the state government while investing funds at lower returns. Such practices, he argued, had created liabilities that ultimately fell upon the public exchequer.
Satheesan maintained that even a favourable Supreme Court ruling on Kerala’s borrowing limits would not eliminate KIIFB’s accumulated repayment obligations. He said the financial burden could eventually expose government assets to attachment, although no such proceedings have been initiated.
The warning came amid an escalating confrontation between the ruling United Democratic Front and the opposition LDF over the findings of an expert committee headed by former Planning Commission Member-Secretary Sudha Pillai.
Satheesan alleged that KIIFB had incurred approximately Rs 400 crore in additional interest liabilities through expensive borrowing arrangements. He also questioned expenditure on publicity, recruitment and construction contracts, arguing that the organisation had operated beyond effective Finance Department supervision.
The Chief Minister claimed that KIIFB spent more than Rs 203 crore on advertisements and promotional activities, although its accounts reflected substantially lower expenditure under the relevant accounting category.
He further alleged that projects initially valued at approximately Rs 45,000 crore eventually involved expenditure reaching Rs 61,000 crore. These figures formed part of his criticism of the institution’s financial management and have become central to the government’s proposed scrutiny.
Satheesan questioned appointments carrying salaries higher than that of the Chief Secretary and alleged that recruitment decisions lacked transparent criteria. He also raised concerns about construction contracts awarded to the Uralungal Labour Contract Cooperative Society without competitive tendering.
The Chief Minister announced that KIIFB’s operations covering the decade from 2016-17 to 2025-26 would undergo a performance audit by the Comptroller and Auditor General.
He also ordered scrutiny of land acquisition in Kannur, where approximately 1,000 acres had been purchased and notifications issued for acquiring another 4,000 acres.
Satheesan alleged that portions of the acquired land were unsuitable for their intended purposes and had been purchased at prices substantially exceeding their underlying value. The allegations have been disputed by opposition leaders.
Former Chief Minister Pinarayi Vijayan defended the infrastructure financing mechanism, arguing that KIIFB had played an important role in delivering public projects that conventional budgetary allocations could not adequately support.
Former Finance Minister K. N. Balagopal similarly maintained that long-term infrastructure investment required borrowing and that the value of assets created should be considered alongside repayment obligations.
The opposition also questioned whether the government would continue Kerala’s legal challenge against the Centre’s decision to include KIIFB borrowings within the state’s borrowing ceiling.
Satheesan argued that this accounting treatment had substantially restricted Kerala’s borrowing capacity and affected annual development expenditure. He claimed the state’s borrowing limit had been reduced by approximately Rs 12,500 crore compared with the previous year.
Nevertheless, the Chief Minister assured legislators that ongoing infrastructure projects would not be abandoned. He said the government intended to proceed with KIIFB-supported works valued at approximately Rs 31,761 crore, including projects already under implementation and those reaching the tendering stage.
(The article ‘Debts threatened govt property attachment, claims Satheesan’ appeared first on Free Press Journal.)
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