It is one roadblock too many for Dubai Tecom, on its Kerala odyssey. As the ?freehold? spat with the state government on its $350-million SmartCity project in Kochi heats up, Tecom has announced that it would freeze operations on the joint venture.
At the centre of the debate is just 19 cents (0.08 hectre), in the land earmarked for the IT infrastructure project. According to the MoU signed between Tecom and the Kerala government on May 2007, this land was in the 114-acre freehold (out of the total 300 acre) entitled to the Tecom project. The renewed lease document does not approve the transfer of this portion, thus raising Tecom?s apprehensions. In a clear show of discontent, Tecom promoters had stayed away from the sixth meeting of the board of directors of Tecom last month.
SmartCity CEO Fareed Abdulrahman has confirmed in a statement that the manpower recruitments are kept ?on hold?, until ?the freehold issue is resolved.? At the same time, the Dubai promoters are not for ?pulling out? of the project. SmartCity is the JV formed between Tecom Investments and Sama Dubai, both members of Dubai Holding. Modelled on the Dubai Internet City , the Dubai Media City and the Dubai Knowledge Village , SmartCity Kochi is envisaged as one of India ?s largest business parks, creating at least 90,000 jobs in the first phase. SmartCity has also signed a pact with the government of Malta to develop SmartCity Malta . Malta and Kochi are the first two cities to be part of the global SmartCity network. Meanwhile, efforts are on to sort out the ?misunderstanding?. The Kerala government views it merely as its partner?s bargaining pitch. A senior state IT ministry official told FE that the Kerala government has written to the Tecom top brass that the issue of freehold can be incorporated into the new lease document, as soon as it gets the nod of the state Cabinet. This is likely to be cleared this week.
But the hitch remains where the location of the freehold would be. The Kerala government is apparently insistent that it should approve the Tecom?s masterplan for the project before identifying the ?freehold? land. Also, the Kerala government?s advice to go ahead with the work on the 132-acre land has put Telcom on its toes.
Even if it does not get its hand on the proposed `freehold? immediately, Tecom is adamant on getting the freehold clause on the fresh lease document approved, fearing policy turnarounds.
It has only been weeks since Smartcity ( Kochi ) Infrastructure Private Ltd has signed up the construction risk managers Hill International on a $9.1-million deal.
The real estate development contract packs a two-and-a-half-year term. More time-bound business commitments mean that a quick wriggle-out is no easy game for the Dubai-based promoters.
