Kerala’s SilverLine Project: Will the Economy bleed?

K Rail Silverline

The Kerala government’s obsession with huge infrastructure projects is not something new. The previous United Democratic Front (UDF) led government and the present Left Democratic Front (LDF) government have all initiated several projects in the past.

But this time it is different, amidst the near apocalypse the state is going through after the three waves of the pandemic and the cataclysmic weather events resulting in huge pile of debts, and unemployment, LDF government has proposed a Semi high-speed rail project called silverLine which is estimated to cost a whopping Rs 63,941 crore, a recipe for Armageddon.

Kerala Rail Development Corporation Ltd (K-Rail) KRDCL, a joint venture between the Kerala government and the Union Ministry of Railways is executing the 529.45 km length project. It will connect the north and south ends of the state, from Thiruvananthapuram to Kasaragod, passing through 11 districts and 11 stations have become the bone of contention between the ruling party and opposition parties like the UDF and the Bharatiya Janata Party (BJP).

When the project is completed by 2025, it will take only 4 hours to travel between the two cities at a speed of 200 km/h, one by third of the present time of 12 hours.

The government claims that the existing roads and highways are congested and railway infrastructure in the state is inadequate to meet the future demands of the people.

According to the K-Rail website, “SilverLine will reduce greenhouse gas emissions, reduce accidents and fatalities in roads, help in expansion of RO-RO (Roll On-Roll Off) services, produce employment opportunities, integrate airports and IT corridors and faster development of cities it passes through”.

Since the inception of the project, it has attracted severe criticism[i] from engineers, environmental experts and opposition parties like the UDF and the BJP. They have voiced their concerns regarding the environmental, social, and financial viability of the project, large scale displacements of people and the environmental damage it can create.

Social activists like Medha patkar and Daya Bai have extended their support[ii] to the movement. The Kerala Paristhithi Aikya Vedi, a collective of 56 environmental organisations in the State, have suggested environmentally sustainable transportation model as an alternative.

Despite the stiff opposition, government is hell bent on bulldozing the project without public consultations. Wide spread protests[iii] from residents across the state against the laying stone and project survey have gathered momentum in the recent days, pressurizing the government to shelve the project.

Though the state had started the project based on the in-principal approval granted by the centre, permission from the NITI Aayog (NA) and the department of expenditure, it is yet to be given clearance by the central Government. If the final approval is delayed, it will result in escalating the cost of the project by around Rs 3500 crore per year.

The final clearance from the centre may not give immunity against project delay, land acquisition is also a thorny issue. Even the Mumbai-Ahmedabad project[iv], a central government project which was to be completed by 2022, is now pushed to 2026 due to land acquisition hurdles.

According to K-Rail, the physical work will be completed within three years on completion of land acquisition. The herculean task of land acquisition from private players is also likely to delay the project deadline and put intense pressure on the government.

If the project is delayed, the year-on-year increase in price of raw materials, capital goods, labour, fuel charges, the volatility in the value of the rupee against the dollar and international factors would escalate the cost of the project.

The Kochi Metro took one decade to complete[v] instead of the proposed four years. Currently, it has incurred Rs 334-crores loss in 2020-21[vi], and Rs 310.82 crores loss in 2019-20 and reports an annual loss [vii]of Rs 310 crores, thereby adding to the already accumulated pile of state debts.

The reasons are many – Kochi has a small population of around six lakhs compared to other metropolitan cities like Chennai or Mumbai. The metro is used only by a fraction of the population, as it is not suitable for last mile travel and the fares are costly, alternative transport options like bus and auto can be used for last mile travel and are cheap, and commuters are dependent on other modes of transportation to reach the metro.

It points out to the undue haste in sanctioning of vainglorious projects by the successive governments without in depth research, survey or studies and could eventually turn out to be a monument to be remembered for the government’s inefficiency.

Further, the mammoth project requires huge investments in exploration of raw materials and production of finished capital goods. The emissions from the construction of railway lines, tunnels, bridges, stations and rolling stocks will render incalculable environmental and ecological degradation.

The worse is yet to come, Kerala’s cataclysmic weather events have rendered the state vulnerable to multiple hazards with severe monsoon flooding in 2018, 2019, 2020 and 2021. In addition, 43% of the state is prone to landslides[viii], especially places like Munnar, Idukki, Mundakkai, Kakkayam in Kozhikode, Nilamur in Malappuram and Kottayam.

The main factors that compounded flooding and landslides were insufficient drainage systems, construction of buildings and roads along stream beds, rivers and flood lines. SilverLine’s embankments may exacerbate flooding and the colossal structure in the form of tunnels, bridges and fencing of the whole area, may hinder the water flow during the floods.

It is high time that state restructure its infrastructural project to adapt to the extreme weather events and redirect the finance and manpower towards mitigating adverse climatic situations.

Sagging economy

The state government informed the centre that it is prepared to repay the loans and bear the cost overrun. It had submitted a proposal seeking a foreign loan [ix]of Rs 33700 crore to the screening committee of the union finance ministry. The centre is expected to forward the loan proposal to foreign money lending institutions such as the Japan International Cooperation Agency (JICA), Asian Infrastructure Investment Bank (AIIB), and Asian Development Bank (ADB).

Can a state like Kerala, a consumer state, dependent entirely on remittances from migrants, afford a large financial burden from foreign loans?

As per the budget for 2021-22, the outstanding debt [x]of Kerala will be Rs 3.27 lakh crore by the end of this fiscal. The Gross state Domestic Product has contracted over the last two years, the unemployment hovering at 9% is higher than the 6% national average, and the fiscal deficit of around 4% of GSDP, all points out to the sagging economy, neck deep in debt, unable to bear another project of this magnitude.

The state is now facing an unprecedented crisis, the ripple effects of which are being felt in every sphere of the economy. The government will lose nothing if it were to shelve the entire project for the time being, and instead focus on mitigating adverse weather events, improving health, education and employment.

When better times come, the SilverLine project plan can be revamped as a more sustainable and green transportation model. Then, It will become a state priority and there will be lesser opposition then.












(Rajesh Trichur Venkiteswaran works as a freelance journalist. He also worked as a faculty for Indira Gandhi National Open University, Dubai and Institute for Chartered Financial Analysts of India. He can be reached at [email protected])



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