Centre denies financial aid for Kerala’s Port City project citing lack of feasibility study, DPR
Kerala’s unified ‘Port City’ project, a strategic initiative announced by the State government in the revised Budget for 2026-27 to integrate Kerala’s entire coastline, ports
Kerala’s unified ‘Port City’ project, a strategic initiative announced by the State government in the revised Budget for 2026-27 to integrate Kerala’s entire coastline, ports, and transport networks into a single maritime economic ecosystem, has received a major setback after the Centre declined its request for financial assistance. The Union government informed the State that the memorandum seeking Central assistance was submitted by Kerala without conducting any feasibility study or preparing a Detailed Project Report (DPR). In a communication to the Kerala government, Union Minister for Ports, Shipping and Waterways Sarbananda Sonowal stated that the memorandum did not include a feasibility study, techno-economic report, or DPR for the projects listed in the proposal. These documents are prerequisites for assessing the technical and financial viability of projects and for appraisal by the competent authority.
Therefore, it was not possible to make any commitment regarding financial assistance or provide timelines for support at this stage, the Centre informed. The Centre also rejected a separate proposal submitted by Chief Minister V.D. Satheesan to Union Finance Minister Nirmala Sitharaman on May 26, seeking an increase in Kerala’s borrowing ceiling by 1% of the Gross State Domestic Product (GSDP) for the 2026-27 financial year. In a communication dated June 18, the Centre said the Union government follows a uniform yardstick while determining the borrowing limits of State governments under Article 293(3) of the Constitution. The annual Net Borrowing Ceiling (NBC) is generally determined in accordance with the fiscal limits recommended by the Finance Commission. Based on the recommendations of the 16th Finance Commission (XVI-FC), the annual NBC for all States, including Kerala, has been fixed at 3% of the GSDP for the 2026-27 financial year.
Earlier, the State had submitted a detailed proposal seeking the development of a Vizhinjam-centric Kerala Maritime Economic Region (KMER). The proposal sought support under various Central initiatives, including PM Gati Shakti, Sagarmala, the Logistics Policy, Blue Economy initiatives, and Maritime Amrit Kaal Vision 2047. It included projects such as last-mile rail connectivity to Vizhinjam and the development of logistics and seafood processing infrastructure. The proposal also sought financial, policy, and institutional support through Central assistance, multilateral financing, and the Public-Private Partnership (PPP) model. It envisages integrating Vizhinjam International Seaport with Cochin Port, Waterway-3, Kerala’s non-major ports, the State’s four international airports, and the national road and rail network into a unified multimodal logistics system. State may approach Centre again Sources in the Kerala government said the State could approach the Centre again with the required supporting documents, including feasibility reports for the projects listed under the Mission Samudra initiative.
The BriefWire