KOCHI: Smart City-Kochi, the much-touted IT project, a joint venture between the Kerala Government (16 per cent) and Tecom Investments (84 per cent), a subsidiary of Dubai Holdings, is in serious trouble. This follows the recent restructuring at Dubai Holdings, which resulted in the elimination of Smart City-Dubai and Tecom Investments, top sources told ‘Express.’Tecom Investments was first abolished, and Smart City-Dubai was made the holding company of Smart City-Kochi. Recently, Smart City-Dubai was also abolished and its equity stake in Smart City-Kochi was transferred to Dubai Holdings.
An official delegation from Dubai and SmartCity-Kochi are meeting Chief Minister Pinarayi Vijayan, most probably in the first week of September, to find a way out of the crisis. It is learnt that Dubai Holdings may want to exit the SmartCity-Kochi project, which will be discussed at the meeting. “Dubai Holdings has invested over Rs 120 crore in the project so far without any returns. But, this is the curse of Kerala as nearly five years was lost in the unnecessary controversy surrounding the acquisition of land for the project,” said a senior bureaucrat.
“The government, along with SmartCity-Kochi, can pave way for a smooth transition if a new investor emerges,” said a source, adding Kerala government’s IT Parks division can also look to acquire the Dubai Holdings’ stake in the project. At least three senior officials confirmed the development at SmartCity-Kochi, but wished not to come on record, reflecting the seriousness of the issue.
It is learnt that Baju George, who held the portfolio as MD of SmartCity-Dubai, and Jaber bin Hafez, CEO of SmartCity-Dubai, have been eased out of their positions at SmartCity-Dubai with Baju now confined to his role as MD of SmartCity-Kochi. Earlier, Baju used to devote his time more or less equally at SmartCity-Dubai and SmartCity-Kochi. A detailed email to Baju, seeking his comments, including his re-delegation of role, did not elicit any response.
Following the restructuring in Dubai, SmartCity-Kochi and SmartCity-Malta - the two projects under SmartCity-Dubai - have become independent entities. “It is possible that a new investor may evince interest to buy Dubai Holdings’ stake in the projects,” said the source.SmartCity-Kochi has had a chequered history with allegations of real estate favouritism and red-tape dogging the project from its start.Former Chief Minister Oommen Chandy inaugurated the first phase of the SmartCity project in February 2015, but it is yet to attract any big companies.
The second and third phases of the project are also way behind schedule. Though the SmartCity-Kochi appointed Synergy Property Development Services as consultant for the project management consultancy services in May 2015, the Bangalore company abandoned the site before completing the work.SmartCity Kochi is being developed in three phases. In its second phase, 9 million sq ft of office space will be constructed, which is slated for completion before the third quarter of 2019, as per the new time line.
The third phase will begin next year and include residential buildings and hotels, a convention centre and sports facilities.
WHAT’S AT STAKE?
Tecom, a subsidiary of Dubai Holdings, holds 84 pc
Team from Dubai and SmartCity-Kochi to meet CM soon
A new investor may buy Tecom stake
Kerala Government can buy the stake
Dubai Holdings has invested Rs 120 crore in SmartCity-Kochi
SmartCity project on track, says IT Sec
Meanwhile, in a late night development on Saturday, Information Technology Secretary M Sivasankar denied the SmartCity project was in limbo and said it would be completed in a time-bound manner. “Reports that the project has hit a roadblock are baseless,” he said.