No story has turned out to be as interesting as the Smart City tale in Kerala’s economy scene, of late. Change of government, dilly-dallying on the project by the powers that be, and political buffoonery have taken the project to a point where doubts have started popping up on whether the project would actually take off or not.

A few weeks ago, in what was termed by the media as a welcome leap, the Smart City project had shown signs of taking off. The parleys between the Kerala Government and Dubai Internet City (DIC) officials regarding the setting up of Smart City in Kochi were reported as having entered the final stage. There were even speculations that the agreement was soon to be inked.

However, nothing happened. The Kerala government had then told the DIC team which visited the sate Chief Minister VS Achuthanandan for final talks that there was change in the government stand against transfer of Infopark and exclusive rights to the authority to set up the IT park. The administration had told the visiting delegation that government's share in the proposed company for implementation of the project would be 16 per cent initially against nine per cent proposed during the erstwhile United Democratic Front government. All said and key issues said to be solved, the discussions which ran for over five-and-a-half hours, failed to reach a consensus on the mode of the initial public offer of the project. The details on this remained to be sorted out.

A team from TECOM, promoters of the DIC, had arrived yet again for another round of parleys. And, this time it was said the project would get underway soon. It did not, even though the government had said that a final decision would be taken before the state Assembly session starts on March 2, 2007. Its almost a month since the assembly session started. Nothing concrete has evolved on the Smart City project proposed to be set up in Kochi.

According to sources, issues persisted on the equity share of the government in the project. Tecom has agreed to give a 16 per cent stake to the government initially, which will be increased to 26 percent in five years. This apart, Tecom has also demanded that the market price of the shares on the date of purchase should be paid when the increase in the stake takes place. However, the state government was not very keen on this aspect as the share price stands the chance of rising considerably when the project goes on stream, said a report.

Meanwhile, as TECOM awaits a government clearance, the state was surprised by the government a few days ago by willing to talk to two more players for the implementation of the Smart City project. The Hong Kong -based JB Group of Companies and then a day later the Muthoot Pappachan Group approached the government with almost similar proposals for the project. The Chief Minister sent out positive signals to both the groups saying that he was interested. While the JB Group said it plans to develop the IT park on a 100-acre plot at Kakkanad at an investment of Rs 1500 crore, close to the Infopark at Kochi, the Muthoot Pappachan Group said it is looking at 200 acres of land at an investment of Rs 2,500 crore.

Both the companies propose to build an IT park which will cater mainly to IT and ITeS companies. According to the JB proposal, the phase 1 of the proposed park would cover 100 acres to be developed in approximately 3 years. The total built up space would be approximately 7 million sq ft. Of this, as much as 5 million sq ft would be go for IT and ITeS companies, while the remaining 2 million sq ft would be for residential facilities, hotels and eco-friendly projects. The project would also boast of its own sewage treatment facilities and captive power generation facilities. The JB Group also proposed to the Chief Minister that it would be willing to take the 100 acres of land for the project on lease for 99 years, at a rate of Rs 85,000 a cent. The JB group’s park will have employment generation potential of more than 100,000 people, it is expected.

Meanwhile Muthoot has said that the group has formally expressed its interest in developing an IT park at Kochi with a built up area of 20 million sq ft, with all support amenities on 200 acres of land. The company also has called for land on a long term lease for 99 years. The Muthoot group said it was willing to offer Rs 90,000 a cent as one time lease rental towards the 200-acre land, earmarked for the project.

On the equity front, the JB Group has offered the state government 26 per cent in the project, while Muthoot also has toed the same line offering as much as 26 per cent equity in the project would be offered to the state government. Muthoot went a step further saying 23 per cent would go to US-based non-resident Keralites.

This is the story so far. A handful players now actively keen on the project. But no one knows what is in the government’s mind. It is left to time to reveal if the Smart City project will ever be implemented at all.