Interest free, long term loan in budget; possibility of getting state share of Sabari rail project as loan from centre

THIRUVANANTHAPURAM: The central budget has cleared the way for an interest-free loan of Rs 1900.47 crore, which is the state share of Sabari rail project, which will be helpful for six districts and Vizhinjam port.

1.5 lakh crore has been earmarked for long-term interest-free loans to states for infrastructure development. This was 75,000 crore in the last budget. The Centre provides interest-free loans to strengthen the participation of states in development. The repayment period is 50 years. Due to financial constraints, Kerala has demanded that the state share be given as a loan by the Centre.

The cost of Sabari rail project is 3800.94 crores and Kerala has to spend 1900.47 crores. Railways stand is that the project will not be considered without state assurance. The finance department said they are helpless stating that Centre is reducing the borrowing limit by infusing the money raised from KIIFB into the state's public debt. The new possibility has emerged when the Chief Secretary Dr V Venu was looking for other ways to raise funds.

The Railway, which had turned a blind eye to the Sabari rail project announced 27 years ago, is now favorable it considering its connectivity to the port. It will pave the way for the development of the hilly areas of Ernakulam, Kottayam, Idukki, Pathanamthitta, Kollam and Thiruvananthapuram districts. It may also be extended to Vizhinjam port as part of the Centre's Rail Sagar project. Roads cannot handle the movement of containers from the port so this railroad is essential. If Kerala applies to the center pointing all this out, it may get a loan.

• In 2021, the state issued an order to bear half the cost. The cost then was 2815 crores.
• When the estimate was revised, the cost was 3811 crores, an increase of 36%. The state government says that the central government's negligence is the reason.
• In 2015, the state announced that it would bear half the cost, but backed out in 2018. With that, the railways became adamant.

"If the Centre decides to give the share as a loan, Kerala is in complete agreement."

V. Abdurahiman,

Minister in charge of Railways