THIRUVANANTHAPURAM: The state government is mulling over winding up the Kerala Infrastructure Investment Fund Board (KIIFB) and Kerala State Social Security Pension Ltd (KSSPL) in the long run, if a report by the state administrative reforms department is anything to go by. The report comes at a time when the government is going through a severe financial crisis and when social security pensions are getting delayed.
The work study report said the two firms were formed as special purpose vehicles, keeping in mind specific intentions, and will be done away with once their purpose is served. The report that looked into restructuring the workload in the finance department, has been vetted by an expert panel and submitted to the government.
It was at the start of the first Pinarayi government’s tenure that KIIFB was floated as a revolutionary concept to facilitate out-of-budget borrowings (OBBs). The KSSPL was later formed to raise funds for social security pensions. Many point out that winding up the latter will send out the message that the government is trying to distance itself from social security pensions. Curiously, it was recently that KIIFB invited tenders to set up a new office.
The move to wind up two prestigious entities is expected to draw severe flak from various quarters. “The government cannot wind up these companies at whim. KSSPL has taken only short-term loans. Once those are repaid, the government can think about terminating it. However, KIIFB cannot just be wound up offhand, as it has 20-year loans pending. These are foolish remarks that cannot be implemented. However, such official observations can hinder KIIFB from getting loans,” said a source.
KIIFB, KSSPL have become irrelevant, says UDF
The UDF said with the provision for OBB gone, the two companies have become irrelevant and are as good as wound up.
“KSSPL was formed for out-of-budget borrowing, without bringing it under public account. That trick failed. Now, it has no relevance. The same is the case with KIIFB, which is currently not taking on another project, after having completed projects worth nearly Rs 28,000 crore. It has turned a monitoring company. In effect, the two firms are de-facto defunct,” said CMP general secretary CP John, an ex-planning board member.
The state government had faced criticism from CAG for its OBB strategy through KIIFB. The government’s move to stand guarantee for the KSSPL too hadn’t gone down well with the auditor. In 2022, the government had distanced itself from the KSSPL by withdrawing all monetary support to the firm.
In the beginning
KIIFB was billed as a revolutionary concept to facilitate out-of-budget borrowings at the start of the first Pinarayi government
KSSPL formed later to raise funds for social security pensions.
Many say winding up KSSPL will send the message that the government is trying to distance itself from social security pensions.