Successive LDF governments have awarded projects worth ₹5,900 crore to the Uralungal Labour Contract Co-operative Society (ULCCS) through KIIFB. Of the 218 projects awarded to ULCCS, fewer than half (108) have been marked as completed.
Among the incomplete projects, 31 have recorded less than 30 per cent progress. The cumulative tender-accepted value (including GST) of these projects is around ₹1,261 crore. Of the projects that are either approved or under way, only 15 have completion deadlines that are yet to expire, as per their original or supplementary agreements.
One major project that has been terminated is the ₹77-crore Kolichal-Cherupuzha Road project, undertaken for the Kerala Road Fund Board. Work began in 2019 and was originally scheduled for completion in 2021. Although the deadline was subsequently extended to May 2026, the project made no progress and was eventually terminated.
Meanwhile, a ₹35-crore Kerala Water Authority project (KIIFB-WSS to Koyilandy Municipality) is currently on hold despite having achieved 84 per cent progress. Its scheduled completion date was March 2026.
Earlier, a 96-page report of the Sudha Pillai Committee, appointed by the UDF government to examine KIIFB, found "no case" for continuing the institution as a body that raises funds and finances projects. It observed that KIIFB's original rationale—that it could raise capital without eating into the state's borrowing space—had been extinguished, as its borrowings are now counted as direct borrowings of the state by the center and the CAG.
The committee also observed that KIIFB borrowed at higher interest rates than those at which the State could raise funds through open-market borrowings, creating an additional annual interest burden on the exchequer.
It had also flagged procedural irregularities in the extension of government guarantees for KIIFB borrowings. In June 2023, the then Finance Secretary advised against continuing government guarantees for KIIFB borrowings, warning that they would reduce Kerala's borrowing space. In October 2023, then Finance Minister K.N. Balagopal endorsed the Finance Secretary's concerns in a file note. However, a meeting convened by the then Chief Minister, Pinarayi Vijayan, in June 2024, decided to proceed with guarantees despite this objection.
More than 100 KIIFB projects have had their tenders accepted since the 2023-24 financial year. Meanwhile, the state government has initiated a detailed vigilance inquiry into alleged procedural lapses and financial irregularities in KIIFB's land acquisitions in Kannur.
