Sabari rail project: Government cash-strapped, alternatives being sought

THIRUVANANTHAPURAM: The government has started efforts to find Rs 1,900.47 crore as state allocation for construction of Sabari rail project, which will benefit six districts and Vizhinjam port. The position of the finance department is that in the situation where the central government has reduced the credit limit of the state, it is not possible to borrow more.

Earlier attempts were made to get money from KIIFB. However, the Centre is reducing the borrowing limit by infusing the money raised from KIIFB into the state's public debt. Chief Secretary Dr V Venu is looking for other ways to find the state allocation for the Sabari rail project after the Finance Department informed about this.

'Kerala Kaumudi' had reported on Friday that the state is turning a blind eye to the project by not paying its share when the Railways, which had so far turned a blind eye to the project announced 27 years ago, now favours it considering factors including the Vizhinjam port connectivity. The government directed the chief secretary to look for other ways to find the money due to this. Kerala is demanding that money be allocated for the project in the central budget and that the state share should be sanctioned as a loan by the centre.

However, the Railway Board is of the view that the DPR will not be considered without an assurance that Kerala will bear half the cost. On June 28, Southern Railway General Manager RN Singh had given a letter to Dean Kuriakose MP clarifying this. Railways will withdraw the order in 2019 freezing the project if the state gives assurance.

Loan will be taken

• As there is no restriction on taking foreign loans for central and state railway projects, loans can be obtained from international agencies at low interest rates and repayment periods of up to 40 years.
• Loans can also be taken by forming a consortium of banks. 100 crores to be paid to Adani for the construction of an embankment at Vizhinjam port and 1086.15 crores for the first phase of Kochi Metro was found in this way.
• Money was raised from Kerala Financial Corporation (KFC) for Vizhinjam. Loans were taken from a consortium of cooperative banks to pay social security pensions.
• 3600 crore loan is being taken from HUDCO under government guarantee for Vizhinjam port. The interest rate is up to 9.15 percent.

Konkan model

The railways and the states of Kerala, Karnataka, Goa and Maharashtra had stakes for the Konkan route. The cost was 3555 crores. Funds were raised through bonds from the domestic financial market. A surcharge is added to the ticket for the refund.

"We are examining ways to find the state share."

- Dr. V. Venu

Chief Secretary