Fear of consultancy: Kerala RTC give up Rs 1000 crore foreign fund

The Transport Department has frozen the Rs 1,000 crore foreign aid project for KSRTC out of concern of consultancy, reports Kerala media.

KSRTC was trying to get foreign funds for the implementation of public transport by avoiding air pollution. Agencies in Japan, Korea, France and Brazil have informed the Department of Transportation of their willingness to provide financial assistance. At the same time, the Corporation was trying to get the green fund of the Asian Development Bank.

The Transport Department had to go back on the project after the agencies requested to hire consultants to transfer funds. As controversies surrounding consultancies, including the E-mobility project, is raging, the fear of another setback for the government has put the file on hold.

Foreign agencies offered loans at one to two per cent interest. KIIFB’S loan to KSRTC was at 4 percent interest. The interest rate of the bank consortium is 8.25%. Therefore, the previous decision was to accept the funds with the permission of the Central Government.

This was communicated with the agencies in Japan and Korea.