Budget blow to PWD

A proposal mooted by the PWD to mobilise funds for road works has been cut to size by the Finance Minister.

March 30, 2015 12:00 am | Updated 06:00 am IST

Over the past fortnight, the attention of the entire State has been on the happenings in the Assembly on budget day and the bitter battle fought by the Opposition and the government outside the House. Once the heat and dust of the budget day violence seemed to have settled down, the focus shifted to the wranglings in the Kerala Congress (M) between Finance Minister K.M. Mani and his party vice chairman and Government Chief Whip P.C. George. As a result, not too many saw the other battles that were on in the ruling combination. One of these, sources in government say, had to do with the heartburn caused by Mr. Mani by ‘hijacking’ a proposal mooted by the Public Works Department (PWD).

The proposal worked out by the Kerala Road Fund Board, a Special Purpose Vehicle (SPV) under the PWD, was to levy Re.1 as cess on every litre of petrol and high speed diesel sold in the State to generate funds for road development works. With Chief Minister Oommen Chandy endorsing the proposal wholeheartedly, the proposal was incorporated in the budget. However, when the Finance Minister finally came out with his budget speech, he spoke nothing about the PWD’s claim to the additional resource. He declared that the funds would go to construction of houses for the shelter-less.

Public Works Minister V. K. Ebrahim Kunju took up the issue with the Chief Minister. That matter was also raised in the United Democratic Front (UDF) legislative party and the Cabinet as well. Under pressure from all sides, the Finance Minister assured Mr. Kunju that 50 per cent of the funds collected through the cess would be given to the PWD and that he would make a formal announcement on this when replying to the discussion on the Vote on Account in the Assembly.

But, Mr. Kunju, his Cabinet colleagues and the PWD officials were in for even greater disappointment when they laid their hands on the Finance Minister's written reply tabled in the House following turmoil over the suspension of Opposition MLAs.

The Finance Minister made it clear in his reply that instead of 50 per cent of the cess amount that they had hoped to get, they would get only 20 per cent. Worse, Mr. Mani gave a double whammy to the PWD by converting the cess into additional sales tax. While transfer of 20 per cent of the cess to PWD would have been automatic, disbursement of the fund accruing as additional sales tax is at the discretion of the Finance Department.

The PWD, which had even prepared a road map utilisation of the cess for the coming 15 years, has lost all hope of getting the funds from the Finance Ministry for the mega projects it had planned to take up in all the districts. When last heard, the PWD was keeping its fingers crossed after Mr. Kunju and his senior colleague and Industries Minister P.K.. Kunhalikutty conveyed to the Chief Minister their displeasure about the Finance Minister’s ‘arbitrary’ action.

The price of natural gas produced in India has been reduced, but Kerala will not benefit from the Union government’s decision as Kerala is not part of the national gas grid.

Though liquefied natural gas (LNG) terminal was commissioned in Kochi more than a year ago, the gas supply lines to connect the national grid has reached nowhere. Kerala could have demanded a share of the gas from the national grid had the pipelines been laid, but that is not to be and a blame game is on in the State over the issue. Chief Minister Oommen Chandy has held several rounds of discussions with the officials connected with gas pipeline laying projects, but to no avail. Local-level resistance has put paid to all his efforts to get the pipeline project completed.

There are several experts in the natural gas business who hold the view that States that do not have pipeline connectivity should also have a fair share of the gas or be compensated appropriately if they consume imported gas at higher prices. The Union government is yet to come out with any such relief. The best thing that the State government can do is to help the agencies engaged in laying of gas pipelines to complete the job. Neither the Chief Minister nor the State administration has so far succeeded in untying the knots in which the project has got entangled and people in the know of things say that the pipeline will remain a dream if the ground reality does not change. And that would call for a great amount of negotiation skills, for, involved in the battle are local vested interests, political actors and many seen and unseen elements. The Chief Minister and the State administration appear to have a real big job on their hands.

(With inputs from

S. Anil Radhakrishnan in Thiruvananthapuram and R. Ramabhadran

Pillai in Kochi).

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