Compensation to TECOM against agreement terms; Government hints at new partnership for Smart City revival

KOCHI: The Kerala government is set to reclaim the 246 acres of leased land allocated for the stalled Smart City project in Kochi, a move that follows the failure of Dubai-based TECOM Group to meet its commitments. The government is hinting that a new partnership with a major local company could revive the project, leading to the decision to take back the land.

According to IT sources, the new company has expressed interest in the Smart City project and the land takeback is in line with initial discussions with this company. The agreement with Tecom includes a provision to reclaim the land by paying Tecom's share price, should the company fail to meet the project’s terms. The government has decided to calculate the investment made by Tecom and provide compensation, in an effort to expedite the land reclamation process and avoid further delays.

Despite years of inaction, the government's move comes amid growing concerns over the stalled project. The opposition, including members of the state cabinet, has raised questions about the decision, alleging a lack of transparency in the process. Some have even demanded that the land be handed over to Infopark, another government IT initiative.

The Smart City project, first launched with great fanfare, has been mired in controversy for over a decade. During the tenure of former Chief Minister V.S. Achuthanandan, Tecom was accused of serious lapses in fulfilling the terms of the agreement signed in 2011. These included failure to meet construction deadlines, inadequate job creation, and a lack of progress in building the promised infrastructure. Tecom also failed to hold regular board meetings, further stalling the project.

Despite the ambitious promises in the agreement, including an investment of Rs 2,609 crore, the creation of a 10 lakh square foot IT park, and 90,000 job opportunities, only a fraction of the targets have been met. To date, a mere 6.5 lakh square feet of office space has been built, and fewer than 3,000 jobs have been created. The project has also failed to attract any large IT companies, with only small IT service firms operating on the site. Some infrastructure, such as a private school and two IT towers, is in the process of completion.

The agreement between the Kerala government and Tecom was structured as a joint venture, with Dubai Holdings owning 84% of the project and the Kerala government holding a 16% stake. The state government now hopes to reinvigorate the project with the involvement of a new partner, addressing long-standing criticisms and working to bring the Smart City vision to life.

As the government moves forward with plans to take back the land and compensate Tecom, it remains to be seen whether this new partnership will lead to the successful completion of the long-delayed Smart City project in Kochi.

Promises in the Smart City Agreement: