Former finance minister and CPM central committee member TM Thomas Isaac, the man who conceptualised KIIFB as a non-revenue model, has made it clear that toll collection was the only way to keep the funding model alive. At the same time, the former finance minister admitted that KIIFB could no longer take up non-revenue-generating projects.

Isaac said the Centre has now given Kerala a choice. "Either collect tolls or shelve KIIFB," Isaac said in Thiruvananthapuram on Thursday, on the eve of the Kerala Budget presentation. "So our plan is to find the alternative that would impose the least burden on the people," he said.

And this plan, though he added the caveat that the LDF government had still not taken a policy decision, is to impose a minimum fee for the utilisation of the assets like roads and bridges and transmission lines created by KIIFB.

"I can assure you one thing. It will not be as high as the tolls collected for national highways," Isaac said. 'Minimum burden toll' was his formula to keep KIIFB afloat. It is not just the lower costs of KIIFB projects that will necessitate a far lower toll. It is the repayment time that will set KIIFB tolls apart from the levies of national highways.

"In the case of national highways, the construction costs should be retrieved within 15-20 years. What is the need to recoup KIIFB investments in 20 years? We will recover it in 50-75 years. There is no written rule that states that all revenue models should recoup their investments in 10 years," Isaac said.

And the former finance minister also sought to present the proposed toll as an act of defiance. "Toll is not for the state's resource mobilisation. It is to counter the impediments that the Centre has put in our way," he said.

He said the proposed toll would be one-fourths of what would be paid at the toll booths of national highways. "The state can also exempt two-wheelers, three-wheelers and local residents," he said. 

Don't you think KIIFB toll would be an additional burden on the public?
Should we not build four-lane roads, lay high-power transmission lines that would provide uninterrupted supply to offices industries and homes, have internet connectivity that will allow our children to use internet at homes and schools? 

Which do you think is better? The benefits that rise from these facilities or the burden of the structural reforms that would be made in KIIFB to tide over the problems created by the Centre? If people say they would rather do away with the burden than enjoy the benefits, then so be it. This is a democracy. 

What forced the LDF to think in terms of tolls?
The Centre had stated that it was unconstitutional to take loans without collecting tolls. This being the case we thought to bring about a reform that would impose the least burden on the people.

The Kerala government has so many public sector undertakings. Are the debts of these PSUs seen as Kerala's debt? KIIFB is also such an institution. 

The Centre's counter argument is that these PSUs have a revenue stream and for KIIFB it comes fully from the state government. Citing KIIFB’s non-revenue model, the Centre has included KIIFB borrowings in state's borrowing limit.

So to stay ahead of the situation we are effecting a reform of the KIIFB model. Even if the entire money is collected in small portions and over a long period of 50-75 years, we can still satisfy the centre's condition of a revenue model. If that happens, can the Centre resist even then?

It will have to treat KIIFB just like any other annuity model with its own revenue. The borrowing of not a single annuity programme in the country has ever been considered as a sovereign (government) debt. So with the reform, KIIFB debts will have to be considered outside the state's open market borrowing limit. And once this happens, we can increase pensions and the current crisis would be solved. 

Isn't this the way we have to take on the Centre. Or should we say that we had said something before and we will stand by it. We have to adapt sand fight. In today's circumstances, reforms are inevitable. 

If you are trying to collect tolls that the CPM had all along opposed and transform KIIFB into a body like the National Highway Authority of India, what kind of a Left alternative is this?

Isaac: We don't exist outside India. The alternative is to engage with the changed realities and not to withdraw from it. 

If Kerala, in general, is against the system of levying tolls, don’t you think Left organisations like the DYFI have had a big role to play?
Isaac: The UDF and the BJP have together disrupted the functioning of the KIIFB model, and we are unwilling to accept surrender. We will find ways to surmount this trouble.

The UDF now threatens that it will not allow the imposition of toll even if it comes in any other name. But my question to them is if the KIIFB is such a bad idea, how are you going to find the money for over one lakh crore development works that have been set in motion in the state? 

Is accepting something that you have traditionally opposed, and had spurned as neoliberal, the only way out of the mess?
Isaac: Times have changed. How can I hold on to those beliefs. When we began, there was an accepted mechanism, the annuity model, to implement non-revenue public projects using government funds. We had used it. The UDF and BJP then played havoc with the functioning of KIIFB saying it is not a revenue model. 

Now, the Centre has set new conditions, which is that the projects should be revenue generating. Shouldn't we take steps to protect our interests based on these new conditions? Can I say that I had once said I will not collect tolls and that I will stick to what I had said? 

Will the CPM's stated policy on tolls also will be revised along with the KIIFB structure?
Isaac: Even now the CPM's policy is that the government should strive not to impose such burden on the public. But the UDF and the BJP have now forced us to choose. Either you collect tolls or shelve KIIFB. So our plan is to find the alternative that would impose the least burden on the people. We will put this up for discussion. 

If a policy decision is taken to collect tolls, won't the KIIFB concentrate only on such revenue projects?
Isaac: Other projects then will have to be done from budgeted funds. KIIFB cannot take up non-revenue projects (like school upgradation) as it would lead to the Centre slashing Kerala's borrowing limit. 

Fact is, KIIFB has already made investments in Kerala's major social sector infrastructure. Over Rs 10,000 crore have been pumped into public colleges, schools and hospitals. Every district have been provided Rs 40 crore for constructing cultural complexes. Rs 15-10 crore have been provided to all districts for indoor stadiums. Such investments have been carried out in the earlier stages itself. What is left is hard infrastructure like industrial corridors, and capital city region improvement projects that require massive land acquisition.

The UDF will have to tell Kerala how they are going to create these modern assets without KIIFB.