- Special Pages
By John Mary
Thiruvananthapuram: The uncertainty over SmartCity Kochi has ended, with Kerala Government and Dubai-based Tecom Investments agreeing to give the company freehold rights on 12 percent of the project area for setting up a global network of self-sustained townships for IT companies at $400m.
This was decided here yesterday by Chief Minister V S Aachuthanandan, Ahmad Humaid Al Tayer, the governor of Dubai International Financial Centre, Fisheries Minister S Sarma, chairman of SmartCity Kochi and Norka Roots vice-chairman Yusuf Ali M A, the managing director of Emke group.
The project had almost foundered on the question of freehold rights. Yesterday’s agreement incorporates freehold rights subject to the provision that the land would not be sold.
Kerala has 16 percent stakes in the project, scalable up to 26 percent, and the rest would belong to Tecom, Sama Dubai and other investors.
Achuthanandan told media persons that the registration of the total 246 acres would take place within a week, with a total waiver of stamp duty and registration fee, and the work would start soon after the approval of the master plan, expected within one month.
“We are confident that we would go ahead with this project”, said Al Tayer, adding, “the UAE is investing heavily in infrastructure, ports and other projects and the total investments here have touched $900m”.
SmartCity Kochi, billed as Kerala’s dream IT project with a potential for 90,000 IT and IT-enabled jobs, has taken almost seven years to reach this stage since it was mooted by Dubai Internet City in November 2004.
An agreement was signed in 2007 but the proposal stumbled on TecomInvestments insistence on absolute freehold rights over 29.6 acres, being 12 percent of the total 246-acre project area.
Kerala Government wrote back saying that 12 percent freehold was a commitment but Tecom would not have the right to sell the land as it was bound by inalienable provisions of India’s SEZ Act. All 246 acres falls within the proposed SEZ.
Tecom insisted on the freehold outside the SEZ but Kerala refused to deviate from the written agreement and even thought of seeking a partner, other than Tecom, to take the project forward. Tecom said it would explore legal options if Kerala reneged on its commitment.
In December last, Kerala appointed Yusuf Ali to mediate with Tecom. He took up the matter with high-ups in Dubai and convinced Al Tayer’s team of the futility of haggling over the 12 percent freehold instead of quickly tapping advantages of setting up shop in Kochi, far less expensive in costs than Dubai.
Both Al Tayer and Achuthanandan patted Ali for his contribution in putting the project back on track.
Ali said it took two months for him and his executives to prepare a detailed presentation to convince the Dubai authorities the need for compromise considering Kochi’s cost advantages and availability of talent pool and bandwidth.
Opposition leader Oommen Chandy pointed out that SmartCity Kochi was mooted during the Congress-led regime in 2004 and hence “it’s our baby. Those days we had to face the opposition from Achuthanandan, then Opposition leader who pooh-poohed it as a real estate fraud, and blanket offers from Tamil Nadu and Andhra Pradesh. There was no provision for freehold during our time”, he said.
SmartCity is the second major foreign direct investment in Kerala after the International Container Transshipment Terminal of Dubai Ports World which Prime Minister Manmohan Singh would dedicate to the nation next week at Vallarpadom, Kochi.
With an estimated built-up space of 8.8 million square feet, Kochi will join Malta as the first two hubs of a global network of knowledge-based industry townships promoted by Tecom Investments.