Khadar PB, 51, a textile shop owner, should by now have got a sprawling IT township with skyscrapers surrounding the waters of Kadambarayar in his neighborhood in Edachira in Kakkanad, the IT hub of Kochi.
This dream was sold to them and 57 other families who were moved out of their ancestral properties adjacent to Edachira Junction in 2008. After all these years, there are some functional IT towers standing and some in various stages of completion. The remaining land is a vast expanse of bushes and shrubs.
Their land was part of 246 acres of land leased to SmartCity (Kochi) Infrastructure Private Limited, a special purpose vehicle (SPV) jointly formed by the state government and Dubai-based Tecom Investments for the development of the SmartCity Kochi (SCK) project. ) Was. -A knowledge-based self-reliant private IT township. “We gave up seven acres of land, which was one of the largest plots acquired. It belonged to three families, whose sole ownership deed was printed on the ₹4 stamp paper of the British era. “We lived there until we moved out and started a new life on a resettlement plot right next to the SmartCity project,” recalls Khader.
The project, which had a history of massive halts since its inception nearly two decades ago, was finally shelved forever as the state Cabinet on December 4 approved the exit plan of Tecom Investments from the SmartCity Kochi project. Gave.
The smartcity project, which had a history of massive halts since it began nearly two decades ago, was finally shelved forever as the state cabinet on December 4 approved the exit plan of Tecom Investments from the project. , Photo courtesy: RK Nitin
A chief secretary-level committee recommended an exit plan based on the advice of the advocate general after Tecom reportedly wrote to the government for such an exit. The Cabinet also decided to constitute a committee comprising Director of Kerala IT Mission, Chief Executive Officer of Infopark, Kochi and Managing Director of Overseas Keralites Investment and Holding Ltd. Baju George to recommend appointment of an independent valuer for valuation . Price to purchase Tecom Investment’s 84% stake in the project. The state government owns the remaining 16%.
Kerala first heard about the project when a team from Dubai paid an informal visit in July 2004 when the Oommen Chandy-led United Democratic Front (UDF) government was in power. More formal discussions began in October that year.
Due to the war of words between the UDF and the then opposition Left Democratic Front (LDF), particularly over the proposed move to hand over Infopark Kochi to Techcom, an MoU was drawn up between the state government and the Dubai-based company. Promoted only in September 2005. SCK was one of the major campaign points in the elections for the state assembly the following year.
For the UDF camp, the state was finally getting a chance to board the IT bus with the SCK project coming into existence. Meanwhile, the LDF accused the government of selling Kerala’s assets to a foreign entity in the name of development. LDF won the election and VS Achuthanandan was sworn in as Chief Minister in 2006.
“The previous UDF government had proposed to give 200 acres of land to Tecom besides Infopark Kochi, out of which 100 acres was to be given free of cost for real estate with a guarantee of 33,300 jobs. “We reworked the agreement and put the onus on Tecom to build 88 lakh sq ft with a ceiling of 70% for IT and create 90,000 jobs in 10 years,” says Joseph C. Mathew, IT advisor to Chief Minister VS Achuthanandan. Made it mandatory.”
Thus the original Framework Agreement was signed in May 2007. A grand foundation stone laying ceremony was held on 16 November. Moss remained on that stone for almost a decade and the project was refusing to start. The meetings of the Board of Directors lasted for hours as the project faced one hurdle after another.
Even the registration of the lease agreement took almost three years as the registration department refused to exempt it from stamp duty, around ₹50 lakh, although the project received Special Economic Zone (SEZ) notification in principle. Was. The file, which was referred by the then Ernakulam District Collector, remained gathering dust in the Finance Department until 2011, when the lease agreement was finally registered with stamp duty exemption.
Tecom then demanded freehold rights, even full rights to sell the land, on the basis that multinationals would not invest in the subleased land. The government agreed to grant freehold rights on specific plots subject to the condition that it should not exceed 12% of the total land, after which Tecom lost interest in the process. The issue of not receiving a single SEZ notification for the entire 246 acres due to a reservoir passing through the project site was finally resolved in 2013.
In fact, as the project was facing inordinate delays, Achuthanandan asked Tecom to leave the company if it had no interest in the project. Industrialist Yusuf Ali was inducted into the board of directors of SCK at the same time and a meeting of stakeholders was held in 2011 to resolve the issues. By that time it was too late. In the second consecutive election, in which the SCK project was a major campaign issue, the Oommen Chandy-led UDF returned to power, albeit with a much reduced majority.
Construction work on the first phase began in July 2013. After much delay, the first IT tower of the 6.50 lakh sq ft SCK project was inaugurated with much fanfare on February 20, 2016, at the end of the Chandy government. LDF boycotted the inauguration ceremony alleging lack of transparency and corruption.
Construction of the second phase of 4.7 million square feet spread across seven towers and creating 60,000 jobs was also launched on the occasion with a promise of commissioning in 36 months. Even after eight years the promise remains unfulfilled. Since then only one more IT tower has been commissioned by the co-developer, while projects of other co-developers are in various stages of completion.
SCK’s only IT tower hosts 27 IT and ITES companies catering to around 5,500 jobs. “When other government IT parks gave rent relaxation during the pandemic, SCK did not give anything. We formed the SmartCity Investors Forum and approached the government several times since 2020 demanding that SCK be brought under Infopark Kochi,” says Derrick Sebastian, who will join SCK in 2022 after spending just four years in the IT tower. Transferred his software company back to Infopark.
SCK officials could not be contacted for comment. However, its website claims that it brought in or facilitated investments of ₹2,609 crore, of which ₹1,935 crore was under various stages of construction by its seven co-developers. It further claimed that “58 lakh sq ft of additional space will be delivered in phases starting from October 2020”.
SCK’s already sinking fortunes were dealt a fatal blow when Tecom’s parent company Dubai Holdings decided to suspend its operations and projects outside Dubai in 2017. The SCK office in Dubai was closed in the same year. “The fate of the project was decided then and there. Only that the government has now decided to act,” says an official who was previously associated with the project.
The Cabinet decision to accelerate the project has now brought it back into the limelight. Opposition leader VD Satheesan accused the government of allegedly planning to distribute 246 acres of valuable land to real estate barons close to the Communist Party of India (Marxist) and provide relief to Tecom through ‘compensation’. The company which was at fault. Senior Congress leader Ramesh Chennithala questioned the inclusion of Baju George, who had represented Tecom in the past and served as SCK CEO, in the three-member committee recommending the independent evaluator.
Chief Minister Pinarayi Vijayan and Industries Minister P. Rajeev accused the opposition of running a misinformation campaign and said the word ‘compensation’ was wrong. The Chief Minister clarified that there is no compensation involved, but steps are being taken to buy out Tecom’s stake in the project, as proposed in clauses 7.2.1 and 7.2.2 of the Basic Framework Agreement. “There are no plans to start joint ventures with private companies. Future development will be under the complete control of the government,” he said.
In the event of default on the part of Tecom, the framework agreement gives the government the right to terminate the lease and purchase the entire shareholding of Tecom at a price determined by an independent valuer, while the land is valued at ₹91.52 crore. Which was the advance lease premium paid by SCK to the government for 88% of the land. In other words, the valuation of land will not be considered in any purchase or sale.
The government decided to adopt a mutually agreed exit policy for TECOM on the grounds that arbitration under the Arbitration and Conciliation Act of 1996 would take time, leaving the land out of use for a long time. A government law official says, “However, a specific clause in the agreement that it will be governed, interpreted and enforced in accordance with the laws of India limits Tecom’s scope to apply UAE laws in arbitration. Is.” Condition of anonymity.
Not everyone is mourning the end of the project; Some want the land to be used for the third phase expansion of Infopark Kochi, which is facing land shortage. “While the SmartCity has created only about 5,000 jobs, the Infopark in the neighborhood has created 70,000 jobs during the last decade. In fact, Techcom should have been asked to exit at least five years ago,” says Anish Panthalani, president of IT workers’ group Progressive Techies.
The government emphasizes that the goals behind the SmartCity Kochi project will not be abandoned, and the government will intervene in the matter to facilitate information technology development in Kerala. Referring to the proximity of the SCK land to the Infopark, the Chief Minister said, “The future course of action is yet to be decided.”
Infopark is exploring other avenues including land pooling for its third phase expansion. But she will not make any demand for SCK land. “This is a policy decision to be taken by the government,” say Infopark officials.
There are reports that the Kerala State Electricity Board Limited, which had given up 100 acres of land for the project, is planning to ask for it back. However, the Power Minister’s office will not confirm any such plan at this time.
Founder and CEO of Technopark G. Vijayaraghavan cites the ill-fated SCK as a classic example of how opportunity never waits for anyone. “Not getting things done on time means missing opportunities. And when an opportunity is lost, look for a new one, but with timely amendments,” he says.
Meanwhile, Khader rues that people like him have become losers due to having to give up land, which is now worth between ₹15 to ₹25 lakh per cent. It was acquired at a maximum price of ₹84,000 per cent. “What was all this drama for?” He wonders.
published – December 12, 2024 08:55 PM IST
