CAG pulls up Pinarayi govt for tardy implementation of Rebuild Kerala Initiative

Thiruvananthapuram: It looks like Kerala has failed to stand up on its feet as quickly as expected after the 2018 deluge killed nearly 500 and inflicted on the state a crushing loss of Rs 25,025 crore.

The Comptroller and Auditor General report on State Finances for the year ending March 2022 has revealed that 48.8 per cent of the foreign assistance received for the Rebuild Kerala Initiative (RBK) during 2019-20 and 2021-22 was released by the government for various reconstruction works till March 2022.

Though the LDF government reasoned that most of the projects were multi-year and multi-sector projects and also that there was an incremental increase in expenditure over the years, the CAG was not convinced. "The reply is not tenable as the works have not been completed even after a lapse of three years of receipt of funds," the report, which was tabled in the Assembly on Thursday (February 15), said.

Kerala had received foreign assistance in two tranches. First, it received an amount of Rs 1,779.58 crore in September 2019 from the World Bank as a loan component of Additional Central Assistance for Externally Aided Projects- 'First Resilient Kerala Program Development Policy Financing'. Then in March 2021, it received Rs 868.45 crore from German Bank KfW as a loan component of Additional Central Assistance for Externally Aided Projects-'Climate Loan Kerala'. Therefore, a total of Rs 2648.03 crore.

Both the loan amounts were debited under the account 'Post Flood Projects under the Rebuild Kerala Initiative'.

"Scrutiny revealed that even though an amount of Rs 2,648.03 crore has been received as World Bank and KfW loans for implementation of Rebuild Kerala Development Programme during 2019-20 to 2021-22, an amount of Rs 1,292.24 crore only was released to RKI as on March 2022 indicating slow progress in implementation of the scheme," the CAG report said.

The State Government replied in March 2023 that RKI is a multi-sector and multi-year programme involving several Government departments and agencies and that these projects pass through various stages, namely the preparation of detailed project reports, administrative sanctions, technical sanctions, and tendering before entering into actual implementation. Further, the government submitted that the expenditure was very low during 2019-20 as only a very few projects were in the implementation stage. However, it said the expenditure had gained momentum during 2020-21 and 2021-22.

Yet, the CAG concluded that the reply "is not tenable as even after a lapse of three years of receipt of funds by the State Government, there has not been much progress in the implementation of the scheme."

In addition to these two loans, Kerala had entered into an agreement with the German Bank KfW in November 2019 under which a total loan of €170 million was to be provided by the bank in reimbursement mode for the reconstruction of flood-damaged roads in Kerala. A new head of account - ‘Post Flood Projects under the Rebuild Kerala Initiative (KfW aided)’ - was created for the purpose. Rs 225 crore was transferred to Kerala State Transport Project but only 41 per cent was utilised till March 31, 2022.

"The slow progress in implementation of Rebuild Kerala Development Programme by RKI had adversely affected the post-flood projects in the State which were required to be implemented urgently in the State," the report said.

Rebuild Kerala Initiative (RKI) was formed in November 2018 with a detailed framework and separate mechanism to coordinate various activities and administrative measures designed to rebuild Kerala in a speedy and efficient manner in the wake of the 2018 August floods.