SmartCity Kerala held up

Dubai : SmartCity Dubai, part of Tecom, wants to hold talks with the Government of Kerala to iron out the issues and to remove the bottlenecks for speedy progress in the Rs15 billion (Dh1.17 billion) SmartCity Kochi project. It is the first SmartCity project in India. The deal was signed in 2007 and has the potential to create over 100,000 jobs in the first stage and around 500,000 jobs directly and indirectly in the last stage.

The SmartCity project in Malta, which was initiated along with the Kochi project, is nearing completion. Here Fareed Abdul Rahman, CEO of SmartCity Dubai and SmartCity Kochi talks in detail about the issues to be sorted out and how to bring the 246 acre project back to life.

 GULF NEWS: The Chief Minister has said that the state government was prepared to hold further talks with SmartCity to remove the roadblocks in the implementation of the project. Has the state government contacted the company over this? Are you interested in any further talks? If so, will you set any conditions before setting out for another round of talks?

FAREED ABDUL RAHMAN: We have always welcomed discussions for the speedy progress of the project so that issues could be sorted out and bottlenecks removed.

In fact, the last round of talks held with the Government of Kerala was on October 1, 2009. We are yet to receive any invitation from the Government of Kerala for any other discussions. Moreover, we have sent an invitation to the Chief Minister for him to visit Dubai so that issues may be discussed and sorted out. We have not received any response to the invitation. It is important that Government of Kerala decision-makers visit Dubai to hold further discussions so that they are convinced of our commitment and can see the kind of quality infrastructure SmartCity Kochi plans to bring to Kochi similarly to Dubai Internet City and Dubai Media City.

 You repeatedly said there was a December deadline. What will be the fate of the project if there's no progress during this month?

December is not a deadline but it's a point past which we have to rethink about the future of the project. But as mentioned earlier, decisions can be taken within minutes and there is no point waiting endlessly.

Our commitment to Kerala and the people of Kerala is important to us and we hope to begin the project soon.

 Freehold land continues to be the major impediment. If it's provided for in the original framework agreement why do you think the state government has now developed cold feet over the issue? If it's your rightful claim why don't you approach the court of law to get it? In addition to this what are the clauses which speak about the freehold in the framework agreement. Can you highlight the details in an annexure and share with us?

The framework agreement is crystal clear in its provision for freehold for SmartCity Kochi, an Indian company with the Government of Kerala also as its partner and the framework agreement Clause 5.4 is available in the public domain for anyone to examine. SmartCity has constantly assured the Government of Kerala that the land will be used for the good of Kochi and in the best interests of the project and its stakeholders which include the Government and people of Kerala. Yet, we are unable to understand the reasons or intentions behind delaying the project in this manner.

SmartCity has made no new demands on this issue. In fact, SmartCity has not asked for the freehold land to be transferred to us right now. As per the framework agreement, the land is to be transferred only after the master plan has been completed. SmartCity Kochi has only asked for assurance that when the master plan is over, freehold will be provided. The assurance has been requested in the form of a letter or by incorporating this into the second lease. The project is certainly being delayed despite our best efforts to communicate with the Government of Kerala to sort out issues.

 The state government states that it would not give any freehold rights to SmartCity that would enable the company to sell it for real estate gains. SmartCity states that it's ready to give the government the assurance that it would not sell off the land. Going by the positions of both the stakeholders the issue should have been resolved by now. Why does it still persist?

The resolution on the freehold issue at this stage will provide the foreign investors the confidence and assurance in investing in Kerala. The issue itself is small and if the Government of Kerala now communicates with us, we would be more than happy to reach conclusions. Wasting the time will eventually cause irreparable damage to the project unless action is taken soon.

 The state government continues to make veiled threats of replacing SmartCity. Is this possible — both legally or practically? What will be your defence if the state government actually goes ahead with such a move?

Though we have been reading about this from the newspapers, so far there has been no official communication regarding this.

We are quite optimistic that we will be able to complete this project as planned. We have fulfilled all the time bound contractual obligations mentioned in the framework agreement. We are not only prepared to develop the project on time but also to face any other contingencies arising due to any unlikely scenario.

 The State government states that Tecom has been badly hit by recession and that the company was intentionally delaying the project to cover up its financial position. How true is this?

For the record sake we would like to clarify again that these are baseless and mindless allegations which lack clarity, information and truth. As a goodwill gesture Tecom invited the Chief Minister to our headquarters in Dubai.