Thiruvananthapuram: The Ministry of Finance has given nod to accept loan from the German financial institution KfW for post-flood rebuilding Kerala activities. Kerala will get Rs 1400 crore ($ 20 crore) as loan and the contract for the same will be signed soon.

The state is going to avail loan from the German bank soon after the World Bank allotted Rs 1725 crore. The fund from the World Bank will be used for the rebuilding of roads in rural areas and the loan from German bank for road development package of the PWD.

KfW has put forward a condition that the state government also should spend an amount equal to the loan amount for the package. Interest rate of the loan is upto 4.5-5 percent.

German bank interested in road construction

The German firm expressed interest to rebuild the PWD roads in a better quality. A rebuilding package for an extensive road system will be designed using the loan amount of Rs 1400 crore and the state’s share of Rs 1400 crore, said Rebuild Kerala CEO and Revenue Principal Secretary V. Venu. The project will be completed within 5 years.

Bigger project than KSTP

The World Bank had granted a loan for rebuilding the roads in Kerala before and it was used up for Kerala State Transport Project (KSTP). A total of 450 km road was constructed in two phases as part of the project. It is assessed that at least 560 km road can be renovated using the German bank loan. In the new project, more length of roads can be completed within 5 years whereas KSTP was completed in 12 years.

AC Road and tunnel in Wayanad

Maintenance of Alappuzha-Changanassery road which was damaged in heavy rains is a permanent headache for the government. The new project may include renovation of this road in a way that can survive floods and rains. Also, a fund for the building of a tunnel through Wayanad Ghat is likely to be allocated.

In the post-flood census, it was decided to prioritize the rebuilding of 1600 km roads. In order to complete these roads in the standard of KSTP roads, it may cost about Rs 8000 crore in Rs 5 crore per km rate. 560 km in this will be reconstructed with the help of German fund.