SmartCity-Kochi in spot over move to lease out land

KOCHI: SmartCity-Kochi Infrastructure, a joint venture formed between Dubai Holding and the Kerala government to attract IT investments to the 246 acres under its possession in Kakkanad, has come under the spotlight following allegations of ‘surreptitious’ sale of land within the park. The project — launched with much ado in 2007 — has no big name to show for even after 13 years.

The first salvo against SmartCity-Kochi, an IT special economic zone, was fired by BJP state president K Surendran when he alleged last week that former IT secretary M Sivasankar, who represented the state government on the company’s board, was trying to sell 30 acres of land in the SEZ ‘surreptitiously’. The state government had given 246 acres to the SmartCity-Kochi township on a 99-year lease at a nominal rent of Re 1 per annum.

Confident Group Builders, a Kochi-based real estate firm, has been appointed by SmartCity-Kochi to develop the free-hold land inside the SEZ for a residential project. The problem, experts point out, is that SmartCity-Kochi Infrastructure, where Dubai Holding owns 84 per cent and the Kerala government the remaining 16 per cent, has not achieved even a semblance of success in achieving its main objective of bringing software companies to invest in the IT park. And the rush to sell the free-hold land to a real estate developer raises suspicion, they said.

As per the ‘Framework Agreement’ signed in May 2007, SmartCity-Kochi promised that it would create 90,000 jobs or 8.8 million square feet of space out of which 6.21 million square feet will be specifically for IT and IT-enabled and allied services within 10 years.

Dubai Holding too had promised to invest Rs 1,700 crore into the project, but it has ended up pledging the land with banks to raise debt, sources said. The 10-year-period ended in 2017. They have created just one building with 6.5 lakh square feet built up area and only 3,000-odd new jobs, sources pointed out.

Ajay Padmanabhan, a Kochi-based consultant and former country head of IL & FS, said the move to sell free-hold land raises suspicion. “Even if it is correct in the letter of the agreement, it is not okay in spirit,” Padmanabhan, who was involved as a consultant to the SmartCity-Kochi project in its conception stage, told TNIE.

Under the agreement, SmartCity-Kochi can set apart 12 per cent of the 246 acres as free-hold land, which comes to about 29 acres. Sources said Manoj Nair, the CEO of SmartCity-Kochi, and Sivasankar were acting hand in glove to scuttle the original plan of the project. The Chief Minister is the chairman of SmartCity-Kochi but it seems he is unaware of the goings-on,  sources said.

A set of queries TNIE sent to Manoj Nair through the company’s PR agency on Friday afternoon did not elicit any response till going to press on Sunday. Roy C J, chairman, Confident Group Builders, confirmed the company signed a ‘firm letter of intent’ with SmartCity-Kochi to build residential flats in 12 acres.

“We have signed for developing 3,000-plus flats in the plot which SmartCity-Kochi wants to allocate to us. This will be the single-largest mega project in Kerala with an investment of ` 1,200 crore. This will not only boost the viability of SmartCity but also facilitate large investment by software companies because we will be bringing in affordable homes within the SmartCity campus,” he said. Roy said the company expects to convert the letter of intent to an agreement soon. “We are waiting for SmartCity-Kochi to get the land in free-hold status from the Kerala government. As soon as that happens, we will proceed with the project.” he said.

It still begs an answer why SmartCity-Kochi wants to lease out the free-hold land when a majority of the area lies vacant. “There are several co-developers within the SEZ, like the Prestige group or the Lulu group. Why can’t they become a co-developer?” asked an investor in the IT park.

Allegations
It was alleged that former IT secretary M Sivasankar, who represented the state government on the company’s board, was trying to sell 30 acres of land in the SEZ ‘surreptitiously’
The rush to sell the free-hold land to a real estate developer raises suspicion, experts say