KOCHI: Nearly 10 months after the state-appointed technical committee submitted its report on TECOM Investments FZ-LLC’s exit from SmartCity Kochi, the Kerala government continues to tread carefully. At the core of the issue lies a delicate mix of diplomacy and business — the state’s effort to buy back the UAE-based company’s 84% stake in the 246-acre IT park promoted jointly with Dubai Holding LLC.
Senior officials told TNIE that the matter is under “active consideration,” with multiple rounds of talks involving the IT department, the chief secretary, and the Chief Minister’s Office (CMO) over the past several months. “This is not just a commercial disengagement. It involves Dubai Holding, one of the UAE’s prominent government-linked entities. The state wants an amicable settlement without affecting bilateral goodwill,” said a top official involved in the process.
The state government has decided not to pay any compensation for TECOM’s exit. Instead, it plans to buy back the company’s 84% equity share. An independent evaluator is being appointed to determine the final valuation of TECOM’s holdings before the ownership transfer is formalised. Sources confirmed that preliminary discussions on this front are underway, and the government hopes to complete the process in a phased manner.
However, the more complicated question revolves around the land itself. The government had hoped that the full 246-acre SmartCity Kochi property could be reclaimed as part of the buyback. But officials now acknowledge that there is hardly any land available for new development within the park.
“There’s a misconception that large tracts are lying idle,” said a senior government official. “Almost all 200 acres earmarked for IT infrastructure have already been leased to developers. What remains are around 40-odd acres originally designated for non-IT purposes — and even that cannot be put to use until it is denotified,” he said, on condition of anonymity. Sources closely associated with the ongoing negotiations also told TNIE that questions have been raised over certain lease agreements finalised inside SmartCity Kochi after TECOM’s decision to withdraw.
“It appears that some land parcels were leased out to developers at rates significantly below the market average even after the exit announcement,” said a person privy to the information. The government, it is understood, is reviewing how these deals were cleared during a period of ownership uncertainty.
TECOM’s decision to pull out, announced by the state cabinet on December 6 , 2024, had been in the works for several years. The Dubai-based promoter, which had developed only around 40 acres since the project’s inception, struggled to revive the park despite multiple extensions.
While industry observers initially viewed TECOM’s exit as a chance for Kerala to take full control of the project, the reality has proven more complex. With most of the land already leased and the remaining portion requiring denotification, the government faces a tough task — reclaiming control of SmartCity Kochi without disrupting its carefully balanced diplomatic and economic ties with the UAE, said sources.
