KOCHI: At a time when the Kerala government is relying heavily on multilateral agencies like JICA and ADB for funding its ambitious SilverLine rail project, the Central government wanted the state to first complete the ongoing projects and those in the pipeline totalling Rs 43,211 crore before taking up new projects.
When the SilverLine project’s loan assistance proposal came up before the Screening Committee of the Department of Economic Affairs (DEA) last August, the committee took note of the number of projects pertaining to Kerala and, after deliberations, “advised” the state government that the existing projects in the pipeline may be completed before taking up new projects, as per the information availed through the RTI. “The government of Kerala is requested to take further necessary action in the matter,” the meeting said.
Kerala has 10 ongoing projects worth Rs 5,884 crore and another eight projects worth Rs 37,327 crore, which have received approval but work has not been started, as of January 27, 2021. More significantly, the Foreign Borrowings/ADB division of the Department of Economic Affairs recommended utilising the loan for some other state where the demand exists and external aid is minimal, it said. The DEA’s stance is at variance with the NITI Aayog which, in last March, said it supports the proposal of the Kerala government to avail the multilateral loan for the semi-high-speed rail project.
Ongoing projects relate to Rebuild Kerala works
NITI Aayog, however said, it would support the state’s plans to approach inernational funding agencies provided the Union government bears no obligations, including repayment, interest or cash loss (including foreign currency fluctuations), and no further multilateral/ bilateral loan for funding cost overrun for the project. When contacted, a senior officer of the state finance department said the Union government officials always feel Kerala and other southern states are getting a disproportionate share of external development loans.
Most of the ongoing projects in the state relate to the Rebuild Kerala Initiative’s works, World Bank’s waste management project, some water resources and dam safety projects, etc., the official explained. The meeting of the Screening Committee for consideration of proposals seeking external assistance from multilateral and bilateral agencies was chaired by Dr C S Mohapatra, additional secretary, bilateral cooperation and foreign borrowings & ADB, Department of Economic Affairs, on January 29 last year.
Kerala’s proposal for SilverLine sought financial assistance of Rs 33,699.8 crore ($4,459.41 million) from ADB, with Rs 6,313.8 crore ($835.49 million) coming from the Central government, Rs 19,675.4 crore ($2,603.59 million) from the state government and Rs 4,251.7 crore ($562.61 million) as counterpart funding from others. The total financial outlay of the SilverLine project is Rs 63,940.7 crore ($8,461.12 million).