The million dollar question. Where has World Bank's $250 million flood money gone?

The million dollar question. Where has World Bank's $250 million flood money gone?
Kerala Finance Minister Thomas Isaac

Thiruvananthapuram: A vast amount, the $250 million (Rs 1789 crore) given by the World Bank for post-flood reconstruction, has gone missing from the treasury.

The Opposition said in the Assembly on Monday that the money was siphoned off to meet routine expenses like salaries and pensions. Finance Minister Thomas Isaac expressed surprise at this logic.

He said the money that flows into the Consolidated Fund of the state is indistinguishable from the money that is already in the Fund and would later flow into the Fund. "There is no such practice of tying up a parcel of money, and stamping it with the seal of exclusivity," he said.

Isaac said it was not improper to use the World Bank money in the Consolidated Fund to meet ways and means requirements. "This is routine procedure, something followed over the years," Isaac said.

Nonetheless, he assured the House that the money would be there whenever a need related to the World Bank fund arose. "You can call it diversion or misappropriation if there is no money when the bills are submitted in the treasury for the works that are to be taken up using the World Bank funds," Isaac said.

The finance minister was responding to Congress MLA V D Satheesan's allegation in the Assembly that the World Bank money had vanished from the separate head under which it was parked.

Leader of Opposition Ramesh Chennithala was not satisfied with the reply and wanted Isaac to acknowledge that he had diverted the World Bank money for unintended purposes.

"You have virtually admitted that you have used up the funds for routine expenses. Why don't you come clean on this," Chennithala said.

At this point, Chief Minister Pinarayi Vijayan intervened. "The money from the World Bank is not meant to be released right now. They are to be released only when the reconstruction works agreed to in the agreement with the World Bank begins," the chief minister said.

The deal with the World Bank was inked on July 28 this year, and the first instalment ($250 million) of the assistance was handed over in September.

Here are the projects for which the World Bank has granted the $250 million loan. One, improved river basin planning and water infrastructure operations management, water supply and sanitation services. Two, resilient and sustainable agriculture, enhanced agriculture risk insurance.

Three, improved resilience of the core road network. Four, unified and more up-to-date land records in high risk areas. Five, risk-based urban planning and strengthened expenditure planning by urban local bodies. Six, strengthened fiscal and public financial management capacity of the state.

"The projects are in the preparation stage. The money will be released when the expenditure begins," Pinarayi said.

Chennithala was insistent. "The money was received in September. Our question is, has any money been spent on any of the World Bank-related projects?" Isaac did not give a definite reply. He just said that this was how the treasury functioned.

Just when Speaker P Sreeramakrishnan was about to wind up the day's proceedings with Isaac's words, Satheesan wanted the House's attention drawn to the minister's violation of rules. "The minister is misleading the House," he said.

"Even if one looks at the cash balance now, there will be no money under the head of account created to park the World Bank money. And it has been three months since the money has arrived and not a single paise has been released from the account to any of the flood-affected persons or places," he said.

The Speaker brushed aside the observation saying the minister had already responded to it. This apparently provoked the Opposition members who got up and shouted at the Speaker with pointed fingers. Nothing was clear in the din. But the Speaker was heard telling V D Satheesan to behave.

At this moment, the chief minister stood up on behalf of the Speaker and made an observation that threatened to push things further out of control. "It is not right to insult the chair," he said. He then went on to say that one of the members, indirectly referring to Satheesan, had shouted at the Speaker to step down from the Chair and be seated with the ruling benches. "Is this how you treat the Chair," Pinarayi asked.

All hell broke loose. The Opposition members rushed to the Speaker's podium and the back benchers from the ruling side stormed forward, as though intent on a physical confrontation. Heated words were exchanged.

The opposition leader soon defused the situation by telling the Speaker that he need not bother about stray remarks hurled from the back benches.