Tolls will be collected on roads built under KIIFB: Chief Minister

THIRUVANANTHAPURAM: Chief Minister Pinarayi Vijayan announced in the state assembly that tolls will be collected on roads built under the Kerala Infrastructure Investment Fund Board (KIIFB). He attributed this decision to the central government’s stance, which necessitated the adoption of a user fee model. The revenue generated from the user fee will be used to repay KIIFB'S loans. The Chief Minister said this while explaining the accusations against KIIFB during the budget discussion.

KIIFB’s revenue primarily comes from one percent fuel cess and a share of motor vehicle tax. Loans are secured by pledging this revenue. Until 2022, KIIFB loans were not included under the state’s borrowing limit, which is why toll collection was not considered necessary.

However, in 2022, the central government brought KIIFB under the state’s borrowing limit, resulting in a loss of borrowing rights amounting to Rs 15,895.50 crore. The state government challenged this decision in the Supreme Court, but the Centre argued that KIIFB projects were not revenue-generating. Consequently, the government decided to convert KIIFB projects into revenue-generating assets, enabling the exclusion of KIIFB loans from the state's debt limit.

Grants to be phased out

• Rs 20,000 crore in grants and Rs 13,100 crore in loans is entirely the responsibility of KIIFB, says the Chief Minister.
• As loans are repaid through user fees, the government’s grants will gradually be phased out.
• With the establishment of KIIFB, capital expenditure has increased. During the last three years of the Oommen Chandy government, capital expenditure was Rs 16,049 crore.
• Over the last three years, including Rs 17,857 crore from KIIFB, a total of Rs 59,630 crore has been spent.