SmartCity Kochi Could generate only about 5,000 jobs.
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A big foreign investor’s entry or exit is a big deal for the investment-starved Kerala. So, when the state cabinet announced that it has allowed Dubai-based Tecom Investments to exit its 84 percent stake in SmartCity Kochi, a 246-acre IT park in which the state government owns the rest, questions were naturally asked about the cost of the pullout.
While the decision lent much-needed clarity to a project that has been in limbo for more than a decade, the circumstances triggered allegations of irregularities and concerns about the process. The opposition has alleged that the decision is rooted in corruption and has demanded an independent probe.
The reasons for suspicion are valid. The government said it would compensate Tecom and has set up an evaluation committee. The problem with this is that Tecom has failed to meet its promises, including generating 90,000 jobs and constructing 8.8 million sq ft of built-up space.
The agreement, signed in 2007, allows the government to claim compensation for failure to meet the promises in 10 years. In the 13 years since the launch of the first phase in 2011, SmartCity Kochi could generate only about 5,000 jobs. Moreover, the government included former SmartCity managing director Baiju George, a Tecom appointee, in the panel to decide the compensation, thus raising questions of ethics and fairness.
The project has been riddled with controversies since inception. It was proposed during the 2004-06 tenure of Congress Chief Minister Oommen Chandy. The CPI(M) first raised objections, calling it a realty deal. But later, when the Left came to power, it was Chief Minister V S Achuthanandan who laid the project’s foundation in 2007.
Tecom’s exit is indeed a case of better late than never. Since the project was moving nowhere, it was seriously hurting Kerala’s IT potential. The government can put the land to better use now. Infopark, the 260-acre IT park next to the SmartCity, is booming and requires more space. The government can either renew the SmartCity project by roping in serious investors or merge it with Infopark.
It must also clarify the circumstances that led to Tecom’s exit and come clean on the allegations. Since the whole episode has raised suspicions about award of the contract, handling of the project and termination of the deal, a thorough probe is a must.
