Thiruvananthapuram:
An expert committee report has said that over a half of Kerala Infrastructure Investment Fund Board's (KIIFB) land acquisition allocation was concentrated in Kannur, the home district of former Chief Minister Pinarayi Vijayan, even as thousands of acres of land remained undeveloped and the state continued to pay interest on borrowed funds.
Kerala Chief Minister VD Satheesan, who released the report on Thursday, called it "biased distribution", that happened without thinking of better returns possibility in cities like Thiruvananthapuram, Kochi and Kozhikode.
The report reveals that KIIFB approved a massive land acquisition programme covering 5,366 acres at an estimated cost of Rs 12,727 crore, with nearly 4,900 acres earmarked for Kannur, a reported increase of 290 percent.
Of this, approximately Rs 2,489 crore was spent acquiring around 1,000 acres in Kannur at an extremely inflated price. However, only a little over 60 acres has so far been handed over for development.
"Had even 500 acres been acquired in Vizhinjam, it would have given a huge push to port development," Satheesan lamented.
The committee has questioned how such a large real estate acquisition programme was approved without a Detailed Project Report (DPR), proper feasibility assessments or a documented justification for concentrating investment in Kannur.
"Even if we pledge this land, the value of it is not even one fifth of the price paid for it," the chief minister stated hinting at possible 'unscrupulous' land deals.
How A Rs 1,887 Crore Proposal Became Rs 12,727 Crore Land Plan
The controversy dates back to October 25, 2018, when KIIFB's board considered a proposal to acquire 1,037 acres of land at an estimated cost of Rs 1,887 crore. Instead, the board approved a much larger acquisition programme covering 5,366 acres at Rs 12,727 crore.
The decision marked a significant departure from the original industrial development plan announced by then Finance Minister Thomas Isaac in July 2016.
The original proposal envisaged industrial zones across five districts - Kannur, Idukki, Kasaragod, Mangada and Vizhinjam.
Kannur was initially allocated 1,000 acres. But under the revised plan, its allocation increased to nearly 4,900 acres, while Thodupuzha and Vizhinjam were dropped.
The expert committee, headed by former Planning Commission Member Secretary Sudha Pillai and including former Union Revenue Secretary Tarun Bajaj, found that the board approved the massive expansion based on a concept note submitted by the Kerala Industrial Infrastructure Development (KINFRA) rather than the Detailed Project Report required under the rules.
The committee found no adequate assessment of industrial demand, economic viability or the reasons for selecting Kannur on such a large scale.
The concept note referred to healthcare facilities, universities, convention tourism and industrial hubs, but did not provide detailed feasibility studies.
Kannur Cornered 52.9 Percent Of Land Acquisition Allocation
Chief Minister VD Satheesan said the media should probe the land ownership and entire land acquisition. He added that the investigation must "expose if there are under the table dealings and favouritism".
The report reveals that Kannur accounted for 52.9 per cent of KIIFB's land acquisition allocation.
The district also received KIIFB approvals worth Rs 23,025 crore, including infrastructure projects and land purchases, nearly a quarter of the agency's total approved project value.
The concentration of investment extended beyond land acquisition.
Thiruvananthapuram, Kannur and Ernakulam together received 41.6 per cent of KIIFB's approvals for roads, buildings and other infrastructure works.
Meanwhile, Idukki, Wayanad, Pathanamthitta and Kasaragod together accounted for less than 10 per cent.
The committee found no adequate development-based justification for this uneven distribution.
It questioned why such a large industrial land acquisition programme was concentrated in Kannur when Kochi, Kerala's commercial hub, and Vizhinjam, with its emerging international port, also required industrial investment.
The uploaded report also identifies approximately 3,829 acres still covered by acquisition notifications, with Rs 9,572 crore associated with the pending acquisition.
Several notifications have been repeatedly extended since 2021, leaving landowners facing prolonged uncertainty over their properties. The committee warned that delays could substantially increase compensation liabilities under land acquisition laws.
It estimated that the overall acquisition cost could eventually rise to approximately Rs 15,000 crore.
Meanwhile, the state continues to service the HUDCO loan used to finance the land purchases, despite the limited development of the acquired property.
SC/ST Projects Received Just 0.18% Of Approvals
The report also highlights the contrast between the concentration of funds in Kannur and allocations for disadvantaged communities. While Kerala's regular budget earmarks 12.64 per cent of plan expenditure for Scheduled Castes and Scheduled Tribes, KIIFB was not required to follow the same allocation mechanism.
Over a decade, projects exclusively intended for these communities received just Rs 182 crore, representing only 0.18 per cent of KIIFB's total approved project value.
The committee said that financing these projects through the regular state budget would have brought them under established allocation safeguards and legislative scrutiny.
KIIFB's Revenue Model Questioned
The committee also questioned the classification of several KIIFB projects as revenue-generating. Of 44 projects in this category, only six had made repayments to KIIFB. Just three had repaid money from their own earnings: KSEB's Transgrid 2.0 project, the first Technocity building and the Kochi petrochemical park.
The remaining projects that made repayments relied on government grants. The committee described this classification as fiscally misleading.
Panel Seeks Comprehensive Review Of Kannur Land Acquisition
The expert committee has recommended a full technical, financial, economic and legal review of the Kannur land acquisition programme. It has also called for an audit of KIIFB's entire land acquisition portfolio.
The committee has proposed transferring unfinished projects considered necessary back to government departments and financing their completion through the state budget.
It estimates that completing these projects over the next five years would require approximately Rs 22,883 crore.
The findings raise fundamental questions about how an infrastructure financing agency intended to support development across Kerala came to concentrate such a substantial portion of its land acquisition resources in the former Chief Minister's home district, without adequate feasibility studies or recorded justification.
KINFRA, former KIIFB CEO KM Abraham and leaders of the previous LDF government are yet to respond to the findings.