Tecom-Kerala Government close Smart City deal

14 May, 2007: The Kerala government and the Dubai technology and Media freezone authority signed the deal for the $350 million-Smart City Kochi project.

Promoters of the project, the Dubai-based Tecom, has agreed to all the conditions listed by the Kerala government and the state cabinet had given the nod for the project in Kochi last month. The conditions adhered to by Tecom include that the Dubai firm would pay the state government Rs 104 crore for the 246 acres of land that will be acquired for the project at Kochi. Of the total land, as much as 30 acres, which would constitute 12 per cent of the total area, would be handed over to the Smart City company in which the government will also have joint ownership. The remaining land will be given to Tecom on a 99-year lease, the CM had said.

The government will own 16 per cent stake in the project initially, which would later be hiked to 26 per cent, i.e. after a five-year period. The government will have two members, including the chairman, in the 10-member Smart City director board.

Post a two-year period, the government stake would increase to 26 per cent and thereby the number of government representatives in the board will be raised to three.

Tecom has also promised to the state government that in a matter of 10 years, a building of 88 lakh sq ft would be completed and 90,000 job openings created.

The project negotiations were started by the ousted chief minister Ummen Chandy and his cabinet. Once the state changed the power after Chandy's tenure of five years, the Left-led coalition came to power and V.S.Achuthanandan became the chief minister of the state.

Being a hard-core leftist, Achuthanandan was criticized from every corner for setting up impractical demands for the construction of Smart City in Kochi. But, defeating all odds, it was Achuthanandan who emerged as the winner in making the TECOM accept the state's demands.

The agreement was signed by Ahmad Bin Byat, executive chairman of Tecom Investment, and Lizzie Jacob, chief secretary of Kerala. The Smart City is expected to bring more IT jobs to Kerala and to be a boon for the engineers from the Southern states. Ahmad Bin Byat said, "This project would certainly put Kerala on the global IT map. It would just not be the IT sector alone that would benefit but others too."