THIRUVANANTHAPURAM: Chief Minister Pinarayi Vijayan on Monday said the state government will not give any compensation to TECOM Investments for withdrawing from the SmartCity Kochi project but will pay the value of the shares the firm has invested in the joint venture.
Pinarayi said the entire 246 acres will be owned by the government.
TECOM, a subsidiary of Dubai Holding, owns 84% stake in SmartCity Kochi, while the state government holds the remaining 16%.
Addressing a press conference on Monday, the CM said the land will be taken over by the state government and leased out to IT and other private companies keen to establish their ventures in the property. He pointed out that Infopark, the IT park adjacent to SmartCity Kochi, is 99% occupied.
“Since the UAE has an emotional connect with Malayalis, and the SmartCity Kochi agreement being a product of the cooperation between the UAE government and state, the government wants to find the proper value of the foreign partner’s investment and repay them. If the government moves with arbitration proceedings, it would drag for years, delaying the allotment of the land to the companies keen to enter or expand in Kochi,” he said. The state has formed a committee to prepare the withdrawal policy.
“The government will have to repay the value of the shares TECOM bought in the SmartCity Kochi. The current situation has emerged following the decision of Dubai Holding to stop operations outside Dubai,” he said.
Park will be under govt custody as public undertaking: Pinarayi
Dismissing allegations about the chances of a joint venture with private companies for the SmartCity Kochi project, the CM said: “There will be no private participation in future. The park will be under the custody of the government as a public undertaking. The 246-acre land will be used for IT development. The government has formed a committee led by the chief secretary and also decided to seek legal advice from the advocate general”.
“In the legal advice under section 7.21 of the framework agreement the government was told to prepare a withdrawal policy instead of serving a notice on TECOM. According to this, either the government or its nominee could buy the shares of TECOM and free it from the contractual obligations. Hence, under the clause 7.2.2 of the framework agreement, it was decided to appoint an independent evaluator to prepare the share value to be given to TECOM,” he said.
Stating that share value is not compensation amount, Pinarayi said: “The state is buying the 84% stake TECOM bought in SmartCity Kochi. If a situation arises in which the lease is to be cancelled, the government has to give the lease premium amount of Rs 91.52 crore and the amount spent for the development of infrastructure. This has been explained in page 19 of the framework agreement,” he said.
He also termed as baseless the reports that the government has no obligation to pay the amount to TECOM.