Pinarayi alleges sustained campaign to undermine KIIFB

Opposition leader Pinarayi Vijayan on Wednesday accused the Kerala government of pursuing a sustained campaign against the Kerala Infrastructure Investment Fund Board (KIIFB), alleging that Chief Minister V D Satheesan was disregarding its contribution to infrastructure development.

Addressing a press conference in Thiruvananthapuram, Vijayan said the government’s criticism overlooked investments in roads, educational institutions, healthcare facilities and other public infrastructure. He maintained that KIIFB had played an effective role in accelerating development and rejected suggestions that its financial arrangements were inherently unsustainable.

The former Chief Minister alleged that efforts to discredit KIIFB had been under way for considerable time. He accused the United Democratic Front government of concentrating on allegations against the institution rather than acknowledging the public benefits of projects undertaken through its financing arrangements.

Vijayan disputed the contention that KIIFB generated no income, pointing out that a portion of the state’s tax revenue was earmarked for the institution. He argued that existing repayment obligations could be managed and that the government’s portrayal of the board’s liabilities did not adequately reflect its funding structure.

He also challenged the application of conventional commercial profitability tests to public infrastructure investment. Expenditure on schools, hospitals and roads, he maintained, could not be judged exclusively by immediate financial returns because such projects were intended to deliver broader social and economic benefits.

His intervention followed a confrontation in the Legislative Assembly over the government’s reassessment of KIIFB and the findings of an expert committee headed by former senior civil servant Sudha Pillai.

Satheesan rejected allegations that his administration had abandoned infrastructure projects initiated through the board. He told the Assembly that ongoing and tendered projects worth approximately Rs 31,761 crore would proceed, notwithstanding the government’s reservations about KIIFB’s financing and administrative arrangements.

The Chief Minister accused the previous Left Democratic Front administration of creating substantial financial liabilities through the institution. He argued that borrowing undertaken by KIIFB had affected the state’s borrowing capacity and placed additional pressure on budgetary resources.

Satheesan also questioned the board’s financial oversight, borrowing practices and land acquisitions. He maintained that the government had an obligation to examine whether public money had been deployed appropriately and whether the institution’s operations complied with established financial safeguards.

Vijayan rejected the suggestion that the expenditure demonstrated financial mismanagement. He argued that infrastructure investment should be assessed against its long-term public purpose rather than treated as an ordinary commercial venture.

The Opposition leader specifically defended land acquired in Kannur, an issue raised by the Chief Minister during the Assembly debate. He said the acquisition was intended to support industrial development, including provision for information technology and science parks.

According to Vijayan, land was secured with long-term requirements in mind rather than immediate utilisation. He maintained that the absence of extensive development shortly after acquisition did not invalidate the original purpose of securing space for future projects.

He further disputed comparisons between the acquisition expenditure and prevailing market prices. Statutory compensation requirements, he argued, could oblige authorities to pay amounts exceeding ordinary market valuations, making direct comparisons misleading.

The government’s concerns extend beyond individual acquisitions. The expert committee has questioned KIIFB’s administrative autonomy, financial controls and expenditure practices, recommending stronger scrutiny of its operations.

The committee has also recommended a comprehensive performance audit by the Comptroller and Auditor General covering the board’s functioning from 2016-17 to 2025-26. Its findings have intensified disagreements over responsibility for the institution’s liabilities and oversight.

Another contentious issue concerns the Centre’s decision to include KIIFB borrowings within Kerala’s borrowing limits. Vijayan argued that this approach undermined the state’s fiscal autonomy and reiterated the previous government’s legal challenge to the arrangement.

He referred to legal advice supporting the position that KIIFB’s borrowings should not automatically be treated as direct state government debt. The dispute remains before the Supreme Court’s Constitution Bench.

Former Finance Minister K N Balagopal also challenged the government’s position during the Assembly proceedings. He argued that a favourable judicial determination could substantially improve Kerala’s borrowing capacity.

The confrontation culminated in an Opposition walkout after Speaker Thiruvanchoor Radhakrishnan declined permission for an adjournment motion moved by Balagopal and G R Anil.

Satheesan maintained that the administration would honour commitments to projects already under execution and those for which tenders had been issued, while continuing its examination of KIIFB’s financial and administrative practices.