# KIIFB Halts Support for West Coast Canal as Land Acquisition Suspended

> KIIFB has virtually halted financing for Kerala's West Coast Canal project, suspending land acquisition.

- Published: 2026-11-03T02:46:20+00:00
- Section: Restructuring
- Author: News Desk
- URL: https://newsforagent.com/news/2026-11-03/kiifb-west-coast-canal-funding-halt
- Source: [New Indian Express](https://www.newindianexpress.com/states/kerala/2026/Nov/03/amid-kiifb-crisis-west-coast-canal-development-project-comes-to-a-standstill)

## Key takeaways

- KIIFB, the principal financier of the West Coast Canal Development Project, has virtually halted financial support, suspending land acquisition and rehabilitation.
- About Rs 116.07 crore has been spent on rehabilitation so far, with around 874 families and around 226 more families needing rehabilitation in the Varkala, Kadinamkulam and Thiruvananthapuram areas.
- A government-appointed committee recommended in October 2026 that KIIFB stop borrowing from the market and funding new projects.

[KIIFB](https://akta.pro/company-profiles/00hi7fk/kiifb), the principal financing agency for Kerala's West Coast Canal Development Project, has virtually halted financial support, suspending land acquisition and rehabilitation for the inland waterway corridor connecting Kovalam in Thiruvananthapuram district with Bekal in Kasaragod. The New Indian Express [reported](https://www.newindianexpress.com/states/kerala/2026/Nov/03/amid-kiifb-crisis-west-coast-canal-development-project-comes-to-a-standstill) on November 3, 2026, that the project has not been officially wound up.

## KIIFB Support Halt Suspends Land Acquisition

Land acquisition and rehabilitation have been suspended along the Parvathy Puthanar canal in Thiruvananthapuram and along the northern stretches of the Mahe-Valapattanam and Nileshwar-Bekal canals. An official associated with the project said progress is impossible without funds. "KIIFB was our primary financing agency for the inland waterway project. However, with its operations virtually paralysed amid ongoing inquiries and a sharp drop in budget allocation, we were directed to temporarily halt land acquisition activities," the official said.

The official said new canal cuts along the Mahe-Valapattanam and Nileshwar-Bekal sectors are essential for uninterrupted, end-to-end connectivity along the West Coast Canal. The Akkulam-Chettuva stretch is yet to achieve continuous connectivity owing to various bottlenecks, and the second stretch, from Kottappuram to Kozhikode, is awaiting financial support from the Centre. The government has spent around Rs 116.07 crore for rehabilitation, and around 874 families and around 226 more families need to be rehabilitated in the Varkala, Kadinamkulam and Thiruvananthapuram areas.

Mission Samudra, the maritime development programme unveiled with a Rs 400-crore allocation, seeks to strengthen coastal shipping and improve connectivity between ports during its initial two phases and offers little to the inland waterway project, according to officials. "The project had started making progress but the government changed as things were moving forward. The budgetary allocation is also low and if KIIFB is not functioning as a funding source, we don't know how the project can move forward," a source said.

## KIIFB's Project Approvals and Bond Funding

According to akta.pro [company records](https://akta.pro/company-data), KIIFB has approved projects valued at INR 60,102 Crores across sectors including healthcare, education, transportation, water supply and power supply. The same records show INR 1,023.71 Crores mobilized through three series of Redeemable and Non-Convertible Non-Statutory Lending Rate bonds by private placement, and INR 300 Crores raised through domestic green bonds. KIIFB was established in 1999 under the KIIF Act as the statutory funding arm of the Government of Kerala, raising capital through SEBI-approved bonds and channelling it to state departments and SPVs.

## Committee and Audit Findings Preceded the Freeze

A government-appointed committee recommended in October 2026 that KIIFB stop borrowing from the market and funding new projects, citing that its original purpose is no longer valid as the Centre counts these loans against the state's borrowing limit, the New Indian Express reported. An expert panel flagged irregularities in KIIFB under the previous Pinarayi Vijayan government, and Chief Minister V D Satheesan said the government would decide on initiating further inquiries after a detailed review of the report, the Deccan Herald reported. Chief Minister VD Satheesan said KIIFB operated as an independent empire, bypassing government controls and creating state liabilities, the New Indian Express reported.

## Companies in this story

- [KIIFB company profile](https://akta.pro/company-profiles/00hi7fk/kiifb) · website: https://www.kiifb.org

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