KOCHI: In a move that Information Technology entrepreneurs and companies termed as “retrograde” and would result in “driving away investments”, the government has issued an order stating that the SmartCity (Kochi) Infrastructure (SCKI) is not an IT park and hence granting rent waiver and payment deferment to IT/ITeS companies operating ‘only’ out of the ‘buildings owned by the government IT parks’ and do not apply to SmartCity-Kochi. Going a step further, the investors have also decided to challenge the government order in the Kerala High Court.
“Kerala Government has leased 246 acres to SmartCity-Kochi in Kakkanad for a period of 99 years, where the Kerala chief minister is the chairman and the government owns 16 per cent. A government which says it wants companies to invest in the state is in fact driving away investors through the order,” said Derrick Sebastian, CEO of Synergia Media Labs, which has invested Rs 70-75 lakh till now for interior design alone. The issue goes back to April 28 when Kerala Government decided to waive off rent for three months for all the IT/ ITeS companies which have taken up to 10,000 sq ft of space operating in governmentowned buildings.
The waiver was for the months of April, May and June and this waiver was on account of Covid-19. A group of 12 companies in SmartCity had moved the court -- first four companies and then another eight -- against SCKI decision not to abide by the government order on rent waiver. “But, now the SCKI management is on a vengeance mood as we challenged the company in the court. They have issued a termination notice to us,” said another investor, who wished to remain anonymous. “The government issuing an order based on the High Court order is ultra vires, or done beyond one’s legal power or authority,” he said.
Added Derrick Sebastian, whose Synergia has leased 3000 sq ft space in SmartCity-Kochi park, and has been there for last two years: “Issuing termination notice is contempt of court as investors have already got a stay from the Ernakulam District Court.” SCKI is a 84:16 joint venture between Dubai Holding and the Kerala government. However, what makes the state government a bigger player is that it has leased 246-acres of land for a paltry Rs 1 per acre per year. SCKI CEO Manoj Nair wa s no t ava i l abl e f o r comment.
“We have been paying rent for all the months except for April, May and June. Further, our deposits are with the SCKI. After spending several lakhs on interior design alone, we are being asked to go. Are they sending the right message,” asked an investor, who just completed about Rs 70 lakh work on interior design alone, but not received the NoC. “When asked, they say it’s because we have gone to the court against them,” he said. In a statement, SCKI said the Kerala Government order “vindicates the position taken by SmartCity-Kochi”.
“It is important to note that the building in SmartCity-Kochi where tenants operate from is not owned by the government-owned IT Parks. The government IT parks- owned projects are Technopark, Infopark and Cyberpark, and the order of April 27, 2020, are not even applicable to the buildings owned by private building developers in these parks, even though the parks are master planned, owned and d e v e l o p e d b y t h e government.”
However, the companies cited the Framework Agreement signed in 2007, which said “the Special Purpose Vehicle and any IT company operating from SmartCity Kochi shall be entitled to privileges, subsidies and concessions as may be applicable or extended to such companies under the IT policies of the government from time to time.”