Kerala CM Satheesan defends KIIFB amid Assembly walkout
Chief Minister V D Satheesan refuted opposition claims that Kerala Infrastructure Investment Fund Board projects were stalled, stating over ₹31,000 crore in works are proceeding despite an expert panel's findings of financial irregularities.
The opposition staged a walkout from the Kerala Assembly after Speaker Thiruvanchoor Radhakrishnan denied permission for an adjournment notice. Opposition MLAs K N Balagopal and G R Anil had moved the notice alleging that KIIFB projects were stopped or stalled. The debate placed KIIFB's finances and the future of its projects at the centre of a heated exchange.
Chief Minister V D Satheesan dismissed allegations that the government was sabotaging KIIFB projects. He refuted opposition claims of stalling. The government is proceeding with KIIFB projects and other works totaling over ₹31,000 crore. Satheesan cited national highway land acquisition, roads in hilly regions, and the proposed Wayanad tunnel road as examples of projects supported through KIIFB funding. He accused the previous United Democratic Front government of wrecking the state's finances through the KIIFB.
Expert panel exposes financial irregularities
A ten-year review of KIIFB's functioning has exposed significant financial and governance failures. The expert committee, headed by retired IAS officer Sudha Pillai, reviewed operations from 2016-17 to 2025-26. Its report was tabled in the Assembly earlier this month.
The committee estimated that projects implemented through KIIFB resulted in excess expenditure of around Rs 13,103 crore compared to execution by government departments. It flagged concerns over payments to consultancy firms, appointments, salary revisions, and borrowing practices undertaken without Finance Department approval. A notable discrepancy involved advertising expenses. For 2025-26, reported promotion costs were Rs 21.16 crore, while audited figures showed Rs 203.72 crore.
The panel recommended major changes to KIIFB's role as a financing agency. The Chief Minister questioned the need for state guarantees on KIIFB's high-interest loans. He alleged KIIFB functioned as a separate entity, bypassing government controls. Irregularities involving land acquisition, borrowings, and expenditure will now be investigated. The Comptroller and Auditor General audit could lead to jail terms for individuals involved, according to the Chief Minister.
Projects continue amid funding uncertainty
While over ₹31,000 crore in works are ongoing, a much larger sum faces an unclear future. The government promised to complete projects already started. Work worth Rs 31,761 crore was continuing. KIIFB projects worth Rs 25,000 crore had been completed.
Yet projects worth Rs 70,000 crore remained to be completed with no clear funding plan. The Chief Minister claimed KIIFB borrowings would add an additional burden of ₹70,000 crore to the government. KIIFB had no revenue-generating projects to meet its commitments. The government's commitment to complete ongoing works now faces scrutiny over how the remaining ₹70,000 crore in pending projects will be funded.
Government asserts control and continuity
The Chief Minister asserted new oversight. The Board would now function under the Finance Department's control. He stated KIIFB's liabilities would ultimately fall on the state government due to loan guarantees. Repayment of KIIFB loans caused treasury leakage amounting to looting of taxpayers' money, according to Satheesan.
KIIFB loans pushed the state into economic crisis, with plan funds cut short by 50% by the fourth quarter of three financial years. State borrowing limits were cut short by ₹12,500 crore compared to the previous year due to KIIFB borrowings. The state had lost Rs 12,000 crore in borrowing capacity after its borrowing limit was reduced.
Opposition figures defended KIIFB's legacy. Balagopal, who had raised objections to KIIFB borrowing when he was Finance Minister, credited it with transforming Kerala's infrastructure over the past decade. He stated KIIFB funding was key for major infrastructure projects including national highways, industrial corridors, and public buildings. Balagopal compared long-term infrastructure funding to a home loan for building future assets.
Leader of the Opposition Pinarayi Vijayan accused CM Satheesan of being uncomfortable when KIIFB was mentioned. The Opposition accused the CM of pursuing a corporate agenda. Satheesan called for constructive discussions instead of political opposition or legal challenges stalling development. The government's immediate focus is completing ongoing works while confronting the challenge of funding the remaining ₹70,000 crore in pending projects.
