Assets to the tune of ₹870 crore created by the debt-laden Infrastructure Leasing & Financial Services (IL&FS) in the State are ‘safe’ and the special purpose vehicles (SPV) created to execute, manage, and maintain two key infrastructure projects in the PPP (Public-Private Partnership) mode are in “good health.”
But, the concern is whether IL&FS will come forward for the proposed ₹3,000-crore Capital Region Development Programme II in view of the liquidity problems and cash crunch.
IL&FS Infrastructure Development Corporation, one of the 24 direct subsidiaries and 135 indirect arms of the holding company IL&FS, was Transactional Adviser (TA) of the Capital Region Development Programme II awaiting the government nod.
Infra majors say the chances for IL&FS investing ₹3,000 crore in the State again are bleak, at the time of restructuring to put the firm back on the rails.
The beleaguered firm had partnered with the State to execute the ₹480-crore Thiruvananthapuram City Road Improvement Project (TCRIP) and the ₹390-crore Sports Hub at Karyavattom. Both the projects had been commissioned and the payment of annuity, including the cost of construction, interest, and 15-year maintenance cost, will end in 2031 for the TCRIP and in 2028 for the Sports Hub.
The annuity payments had been delayed and the government owes Thiruvananthapuram Road Development Company Limited (TRDCL), the SPV created for executing the TCRIP, ₹60 crore. Another ₹50 crore due to Karyavattom Sports Facilities Ltd (KSFL), the SPV for Sports Hub, has not been paid by the government.
“Since the two infra projects are in the PPP mode, they are being monitored by the Reserve Bank of India (RBI) through the lenders. The assets are safe. Payments have to be realised from the government. It is not unexpected since the State is involved. The liability can be assessed only when the project is closed. The TRDCL and the KSFL are in sound health,” sources associated with the project said.
The subsidiaries of IL&FS were also involved in the Kochi Water Metro, Additional Skill Acquisition Programme, and the GAIL pipeline project as Transactional Adviser.
The debt-laden firm was initially involved in the Vizhinjam international deepwater seaport project as promoters by bringing in ₹8,000 crore.
