THIRUVANANTHAPURAM: Chief Minister VD Satheesan on Thursday said KIIFB functioned as an independent empire that created a huge liability for the state. “The board functioned by bypassing the controls of the government and finance department. The finance department was a mere onlooker,” he told mediapersons after presenting the expert committee report in the assembly.
The CM said the committee found irregularities in payments to consultancies and in land acquisition.
“The government will decide what kind of investigation should be conducted into the irregularities. Projects started through KIIFB will be completed, as the system cannot be ended overnight,” he said, adding that the government guaranteed all these loans. Satheesan said a meeting chaired by his predecessor, Pinarayi Vijayan, had overturned the department’s decision not to give guarantees to KIIFB. This, he said, was a violation of Rules of Business as only the cabinet can overrule the department’s decision.
“Borrowing at higher interest rates caused an additional liability of `396 crore. The Masala Bond issuance resulted in a loss of `181 crore. An extra expense of `13,103 crore was incurred in the implementation of various projects,” he alleged.
“In Kannur, only 50 acres of the 1,000 acres, acquired for projects at five times its value, was used. Notifications were issued to acquire another 4,000 acres. No one knows why so much land was acquired in Kannur at such a high price,” the chief minister said. He also said though the KIIFB showed `21.16 crore as advertisement expenses, actual spending was over `203 crore. This money was borrowed at high interest rates.
The committee’s findings validated what the then opposition had been saying since the start of KIIFB, he said.
