KOCHI: TECOM Investments, a subsidiary of Dubai Holding LLC, which owns an 84% stake in SmartCity Kochi, a 246-acre IT park in Kakkanad, is withdrawing from the project. The state government holds the remaining 16% stake in the project.
Contours of the withdrawal, including the compensation to be given to TECOM, will be decided by a government-appointed committee headed by the chief secretary. Industries Minister P Rajeeve said the committee will comprise the Kerala State IT Mission director, the Infopark CEO, and MD of Overseas Keralites Investment and Holding Ltd Dr Baju George.
“The committee has been directed to study various aspects and submit recommendations. An independent evaluator will be appointed to calculate the compensation amount that needs to be paid to TECOM,” he said. Dissatisfaction over TECOM’s performance in developing the IT park has been brewing for some time, and prompted the cabinet’s Wednesday decision to approve the recommendations of the chief secretary-led committee.
The nod for the recommendations comes two years after TECOM wrote to the state government expressing its desire to withdraw from SmartCity Kochi.
The IT park has been mired in controversies ever since the Oommen Chandy-led UDF government proposed the project during its tenure from 2004 to 2006. The then opposition under V S Achuthanandan had alleged that TECOM was a real estate firm and not a company backed by the Dubai government.
Then, in early 2012, the Achuthanandan government signed the agreement, clearing the hurdles for the much-hyped project. However, it was dedicated to the nation by Chandy in February 2016, just months before the UDF was voted out of power.
SmartCity Kochi was started as a joint venture between the Kerala government and Dubai Holding to develop an IT special economic zone in Kochi. It was implemented by Smart City (Kochi) Infrastructure Pvt Ltd based on successful models of Dubai Internet City, Dubai Media City, and Dubai Knowledge City.
TECOM failed to deliver on its promises: Min
The project promised creation of over 90,000 direct jobs. It was to include a 650,000 sq ft IT tower, residential areas, schools, higher education, sports, retail, and hospitality. However, as of 2021, SmartCity houses 50 companies, including Fortune 500 firms such as Baker Hughes and Ernst & Young, and employs close to 5,000 professionals.
Rajeeve said TECOM failed to deliver what it promised. “They didn’t utilise the land to develop the infrastructure facilities as promised. The state government will be holding discussions with the firm to arrive at a formula regarding exit plans. As for the equity the company holds, a decision as to whether the state government will take it over or look into other options too will be taken after the talks,” he said.
The government’s decision has come as a silver lining for Infopark, which is looking for land to expand. As per sources in the IT department, very few agencies are capable of taking over TECOM’s equity. Infopark’s name is doing the rounds among the list of these agencies.
