Mr Sabarinathan also alleged there was mystery in the projects listed by the KIIFB in its offer circulars.
Thiruvananthapuram: The Opposition, which raised the Masala Bond issue in the Assembly on Tuesday, targeted the government for showing special favour to a Canadian firm, CDPQ, which allegedly has high stakes in the controversial SNC-Lavalin company. The coupon rate of 9.72 per cent was 'exorbitant,' the Opposition said.
Chief Minister Pinarayi Vijayan is still engaged in a legal battle in the Supreme Court over the deal with Lavalin for the renovation of Pallivasal, Sengulam and Panniyar hydel projects in 1995 when he was power minister.
The Opposition said Finance Minister T. M. Thomas Isaac had embraced neo-liberal economic policies after opposing them earlier.
Mr K.S. Sabarinathan, who initiated the debate, alleged that the coupon rate of 9.72 per cent was unbelievably high. Of the nearly 50 masala bonds issued in the last two years, the KIIFB coupon rate was the highest.
It is at least two per cent higher than that of the masala bonds issued recently by public sector companies, including National Highway Authority of India and NTPC.
Mr Sabarinathan also alleged there was mystery in the projects listed by the KIIFB in its offer circulars.
He pointed out that the first circular issued in December 2018 had listed hill highway, K-FON, coastal highway, Transgrid, upgradation of hospitals and schools and city and town development as the major projects.
However, the second offer circular issued on March 29, 2019 had a new project called Kannur Industrial Park with a high cost of Rs 12,240 crore.
He wondered from where this project emerged as not a single MLA from Kannur or even a minister had any idea about it. He suspected a link between CDPQ and the proposed park.
The CDPQ has strong links with SNC-Lavalin as it held 20 per cent shares in SNC-Lavalin. It was CDPQ that came to the aid of Lavalin when Canadian Prime Minister Justin Trudeau's office came under attack on allegations of protecting SNC-Lavalin in a criminal investigation recently, Mr Sabarinathan said.
He claimed that no investor will be willing to purchase bonds at this rate. He also claimed that half of the yearly motor vehicles tax and the petrol cess will not be enough for repaying the loan by 2030. Both of them will be diverted to the KIIFB.
By 2030, it will have to pay back the interest and principal of Rs 50,000 crore that it would borrow and invest in five years. This calculation was made by keeping nine per cent as the average interest rate, he said.
Opposition Leader Ramesh Chennithala said that KIIFB did a secret private placement in Canada, specifically for CDPQ.
This was proved by the fact that the government wanted the company with links to SNC-Lavalin to make profit from a state deal. CDPQ and Lavalin officials had come to the state in February to hold negotiations with the LDF government, he alleged.
