The construction of a cancer centre worth Rs 384 crore at the Government Medical College in Kochi has been stopped for a second time by the KIIFB (Kerala Infrastructure Investment Fund Board) as the construction company has failed to meet the deadlines and quality standards, according to KIIFB’s note. The project was supposed to be completed by June 25, 2020. According to the KIIFB, so far, the construction company has completed only 34% of the work.
"The company has been instructed to fix the lapses. After that, a retendering will be done and only then work will resume," the KIIFB note dated December 24 states.
KIIFB is a Kerala government-owned financial institution set up to mobilise funds for infrastructure development from outside the state. INKEL, a Public-Private Partnership (PPP) initiative promoted by the Kerala government, was roped in by KIIFB as a special purpose vehicle construction company to build the nine-floor Cancer Centre in a plot area of 12.12 acre with 420 beds.
The Kerala government has a 22.78% share in INKEL, which has suffered a loss according to its 2019-20 Annual Report. The next biggest shareholder is NRI-businessman MA Yusuffali. He holds 17.02% shares of the company.
On November 26, 2019, late in the evening, the cancer centre under construction collapsed and six workers were injured. Following this, the KIIFB had issued a stop memo to the construction of Cochin Cancer Research Centre for the first time.
KIIFB chief executive officer KM Abraham had told the media then that “instead of the stipulated materials, the scaffolding was done using bamboo poles. The ground was not properly strengthened before the scaffolding was erected.”
The KIIFB sees the cancer centre project as a prestigious one. This December, KIIFB had convened a meeting to assess the situation of INKEL’s cancer centre project and has decided to cancel the contract and consult a hospital construction expert.
INKEL at loss
Quoting INKEL’s 2019-20 financial report released on December 4, 2020, B Narayan, a financial analyst, said that the company has suffered a net loss of the year under review amounting to Rs 13 crore.
“KIIFB itself had said in December 2019, that it is in the process of taking urgent remedial measures and resuming the work on the project in full pace. On-ground construction work at the site is in active progress. The construction package for all main civil works is at full pace. With an implementation period of 36 months from the date of approval, the first phase of the project will be completed by the end of 2020. But again, the SPV has faulted and the KIIFB has stopped the project,” Narayan said.
Narayan added that INKEL has been awarded several other projects by KIIFB and there is a need to probe those projects' standards too.
The News Minute found from the INKEL 2019-20 Annual Report, that the company was conferred with the status of a special purpose vehicle by the Kerala government for the execution of major health care projects under its “Healthcare to the Poor‟ mission.
It is doing work at the general hospital in Ernakulam worth Rs 76 crore, new block at taluk hospital in Punalur worth Rs 68 crore and is also doing development work at 39 schools worth Rs 99 crore.
PJ James, a CPI-ML (Red Star) leader in Kerala, said that, when KIIFB itself is saying that they have found lapses with work done by INKEL in Cochin Cancer Centre, it should investigate the other works done by INKEL.
“INKEL’s other projects should also be investigated. KIIFB’s September 4, 2020, note says that that projects submitted by different SPVs (special purpose vehicles) are submitted before technical checks. And the September 12, 2020 note says that project quality is compromised and failures are happening,” James said, adding that without proper controls many faulty projects wasting public money will be coming up in the state.
James added that KIIFB is going to harm Kerala’s financial conditions badly.
“KIIFB itself says that SPVs are failing to adhere to quality standards. Additionally, in February 2020, it had said that SPVs are delaying projects and that would stress other projects. So, what does it mean? It means that there are no proper controls put in place. Taxpayers' money is being looted,” he added.
In October, KIIFB had issued a handbook for SPVs advising them to adhere to proper standards to ensure the quality of work. In that handbook, the KIIFB had observed some 22 points as ‘faults’ of SPVs.
Meanwhile, INKEL’s 2019-20 Annual Report states that work is in progress and 34% of civil work is completed as of the date of this report and the project is expected to be completed by July 2021.