Another hold back for delayed KochiSmart City project

The already much delayed Rs.15 billion ($375 million) information technology park, the Smart City project, in the state's industrial hub Kochi, received a further jolt Wednesday when the Kerala government changed its stand once again on the project's Special Economic Zone (SEZ) status.

The project, being implemented jointly by the Kerala state government and Dubai Internet City (DIC), was supposed to come up according to the rules and guidelines laid down in the agreement between DIC and the state government.

According to central government regulations, SEZ projects in Inda are entitled to a number of tax benefits and easier regulations.

The Kerala government, however, has declared an SEZ policy which is more restrictive than the central government norms and a state minister Wednesday said these more stringent norms will now be applicable to the Smart City project.

The state's Chief Minister V.S. Achuthanandan had, however, said last month that the state government's SEZ policy would not be applicable to the Smart City project.

Yet, Wednesday this stand appeared to have been reversed when the state's parliamentary affairs minister M. Vijayakumar told the state assembly in reply to an opposition question that the state SEZ policy would be applicable to the Smart City project as well.

'Kerala has floated a policy guideline with regard to SEZs and that would be applicable to Smart City project like it is applicable to the 10 new applications for SEZs that have been cleared by the state government and forwarded to the Centre,' Vijayakumar said.

At a post cabinet meeting briefing here last month, Achuthanandan and the state fisheries minister S. Sarma, who is also the chairman of the project, had said that the new SEZ guidelines would not be applicable for Smart City.

Instead, the rules and guidelines laid down in the agreement between DIC and the state government would be followed.

When Vijayakumar reversed this stand Wednesday, the entire opposition was on its feet demanding an explanation from Achuthanandan.

To wriggle out of the situation, Achuthanandan, said that the opposition need not expect a reply from him in the manner in which they want.

Soon the entire opposition was on their feet but Speaker of the assembly K. Radhakrishnan cooled down tempers and said that all issues could be looked into during the course of the assembly session.

The project would have 8.8 million square feet of built-up space, of which 70 percent would be for information technology and information technology enabled services and would employ 90,000 professionals.

The project is now at the crossroads with nothing happening after the foundation stone was laid a year back.

The Dubai team is upset that for the project's first phase, only 136 acres of land was granted SEZ clearance last year and the remaining 100 acres is yet to get the clearance.

Another grouse they have is that the state government has still not given any concession to them with regard to registration and stamp duties on land transactions.

The conditions for SEZ that has been cleared by Kerala's Left coalition government include: no agricultural land will be acquired for SEZs; land will not be acquired for sanctioning SEZs in the private sector; no rebates will be allowed for electricity; Panchayati Raj rules will be applicable; tax holidays will be there only for 10 years; 70 percent of the land will have to be used for industrial purposes and the balance 30 percent for residential apartments; and no apartments can be sold to outside parties.

All labour laws prevailing in the state will also be applicable to these SEZs.

With Smart City's fifth board of directors' meeting scheduled for next month, all these issues are likely to come and it remains to be seen what stand the government will take in that meeting.

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Funds row, Smart City issue set to rock Kerala assembly

The Kerala assembly session starting on Monday is likely to see some sparks fly as the opposition United Democratic Front (UDF) is ready to take on the government on issues like the alleged misutilisation of central funds and the delay in the much-hyped Rs15bn Smart City IT project in Kochi.

The Congress-led UDF, the 43-member opposition in the state assembly, says it is all set to “expose” the failure of the two-and-a-half-year long V S Achuthanandan government.

“We will expose the failure of the Achuthanandan government and the reason why this government, in order to cover up their failure, last month staged a protest in Delhi. Never before has the central government pumped in funds to Kerala through various schemes and the government has made a mess of it,” said Congress leader V D Satheesan.

The funds that Kerala received from the central government include the Kuttanad package and the Idukki package. They have brought in funds to the tune of Rs30bn meant for revival of the state’s now-defunct agriculture sector.

“The state government, instead of blaming the central government, if it had prepared the detailed project report for the Kuttanad package, the centre would have released the funds by now,” Satheesan said.

Among the other central schemes that have not been properly utilised include the national rural employment guarantee scheme, the national rural health mission and the tsunami rehabilitation package, for which the term ends in March 2009, he added.
The Smart City project coming up in Kochi, the Rs15bn IT project to be built by the Dubai based Smart City, would be another issue that the opposition would take up.
“It is more than a year since the foundation stone for the project was laid and since then nothing has happened. Now they are dictating terms and hence the government is caught on the back foot,” Satheesan said.

But state Parliamentary Minister M Vijayakumar said that the government was doing its job.

“We have now reached the half-way mark of our term and from now on we will be consolidating the foundations that have been laid on the various projects and programmes. We have done several programmes and without doubt we can say that this government in a short period of time has certainly put its best foot forward,” Vijayakumar said.

He, however, admitted that time was lost in dealing with certain controversies. – Indo-Asian News Service.

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Protest over SmartCity Kochi delay

Thrikkakkara East and West mandalam committees of the Congress will observe Sunday as “a lost year” marking the completion of one year of the laying of the foundation stone of the proposed SmartCity Kochi project.

Kerala Pradesh Congress Committee general secretary Benny Behannan will place a wreath where the foundation stone was laid on November 16 last year. This will be followed by a protest march to the Kakkanad junction where KPCC president Ramesh Chennithala will inaugurate a public meeting to protest the delay in implementing the project. K. Babu, MLA, will preside. District Congress Committee president, V.J. Paulose; United Democratic Front district convener, K.P. Dhanapalan; and former minister, Dominic Presentation, will speak.

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A high-level delegation from SmartCity is set to arrive in the city next week to discuss the proposals of the core committee to expedite the progress of the project and to reach a decision on them.

A core committee with the district collector as chairperson was formed to recommend solutions to the twin problems— the relocation of a Public Works Department (PWD) road and that of the installations of the electricity department —on the 100 acres of the project area.

SmartCity Kochi agreed to share the cost of reconstructing the dormitory complex and relocating the air quality monitoring station of the KSEB. However, the company disagreed over the estimate of Rs.1.04 crore presented by the electricity department for the reconstruction of the dormitory complex. But at the same time it accepted the estimate of Rs.3.40 lakh for the relocation of air quality monitoring station.

The officials will meet the district collector and the core committee members to discuss the issues related to the proposal on cost sharing for relocating the installation and other structures of the electricity department.

The visit is part of the efforts of the promoters to expedite the process of securing the Special Economic Zone (SEZ) status for the project. At the last meeting of the director board, the SmartCity officials, in the presence of Fisheries Minister S Sharma, who is also the chairman of SmartCity Kochi, had said that the construction works of the project will start only after getting the SEZ notification from the Centre.

Even though the registration of the land and stamp duty exemption are still pending, SmartCity has decided to sort out other critical issues, a release issued by the company said.

“Today our immediate priority is obtaining the stamp duty exemption and to secure the SEZ status for SmartCity Kochi in order to begin the construction. We have been and will continue to do everything in our hands to remove the bottlenecks and expedite the progress,” said Fareed Abdulrahman, Chief Executive Officer of SmartCity Kochi.

SmartCity Kochi has, in principle, agreed to relocate the PWD road on its own. However, this is yet to be approved by the board members.

SmartCity Kochi will lay the alternative to the PWD road complying with international standards, and on completion it will be handed over to the district administration, the release said.

Meanwhile, SmartCity Kochi has written to the district administration requesting possession of nearly 19 cents within the 100 acres that was not part of the original land deal.

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A high-level team of Dubai-based Tecom, which is partnering the Kerala government for SmartCity, is arriving here next week to sort out various issues pertaining to the project.

Though the foundation stone for the project was laid a year ago, civil work is yet to begin. Moreover, it is alleged that Tecom is trying to delay the implementation due to world economic turmoil.

However, Fareed Abdulrahman, CEO of SmartCity, says, “Our immediate priority is to obtain stamp duty exemption and secure SEZ status for SmartCity to enable us to begin the construction. We have been and will continue to do everything in our hands to remove the bottlenecks and expedite the project.”

The proposed land for the project is divided by a river and, therefore, requires two separate approvals for SEZ status. Currently, the project has SEZ status only for 134 acres. The approval for the other 100 acres of Brahmapuram land, which has Kerala State Electricity Board's installations, is pending with the Centre.

The Tecom officials will be meeting the district collector and the core committee members to discuss issues related to cost sharing for relocating the installation and other structures on the 100 acres.

Meanwhile, SmartCity has, in principle, agreed to relocate the PWD road inside the project land at its own cost. However, this is yet to be approved by the board members. The company has proposed to lay an alternative road.

Further, SmartCity Kochi has already approached the district administration to acquire approximately 19 cents of the land located in the heart of the 100-acre land parcel, which was not part of the initial proposal.

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SmartCity Kochi authorities are yet to respond to the proposals of a core committee formed to look into the hurdles in the progress of the proposed project.

“We have already forwarded the proposals to the State government. It is now for the project development team of SmartCity Kochi to study the recommendations and submit a proposal to the company authorities for approval,” said District Collector M. Beena. This, she said, was not happening at a great speed at the moment.

A core committee with district collector as chairperson was formed to recommend solutions to the twin problems - the relocation of a Public Works Department (PWD) road and that of the installations of the electricity department – on the 100 acres of the project area.

She said that a State-level meeting is on the anvil to follow up on the proposals of the core committee. The discussion is expected to take place on Monday on the sidelines of a meeting to discuss the land acquisition for the second phase expansion of Infopark.

Unless a final decision was reached on these two issues, the promoters would not be able to approach the Board of Approval for SEZs of the Union government seeking SEZ status for 100 acres involved. Meanwhile there are reports that Fareed Abdulrahman, the chief executive officer of SmartCity Kochi, might visit the city in the next few days. In that case, efforts would be made to broach the issues with him.

At its first meeting held on October 18, the core committee had recommended the SmartCity Kochi authorities to relocate the PWD road on its own citing the procedural delay if it were to be undertaken on a cost sharing basis with the government.

Since the company was a direct beneficiary of the road, it had an equal interest in the quality of the relocated road.

The committee had also approved the estimate of Rs. 2 crore placed before it by the PWD for the relocation of the road. SmartCity Kochi agreed to share the cost of reconstructing the dormitory complex and relocating the air quality monitoring station of the electricity department. However, the percentage of cost sharing between the stakeholders was yet to be decided. The committee’s recommendation to the company was to reconstruct the dormitory on its own to avert any procedural delay. While SmartCity disagreed over the estimate of Rs. 1.04 crore presented by the electricity department for the reconstruction of the dormitory complex, it accepted the estimate of Rs. 3.40 lakh for the relocation of air quality monitoring station.

However, all these proposals of the committee were subject to the approval of the director board of the SmartCity Kochi.

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SmartCity Kochi panel submits proposals

A core committee formed to look into the hurdles in the progress of the proposed SmartCity Kochi project has drafted a set of proposals.

These proposals would now be forwarded to the State government and the director board of SmartCity Kochi for consideration, District Collector M. Beena, chairperson of the committee, said.

The committee was asked to recommend solutions regarding the relocation of a Public Works Department (PWD) road going through the middle of 100 acres of the project area and that of the installations of the electricity department.

The committee approved the estimate of Rs. 2 crore placed before it by the PWD for the relocation of the road, the Collector said. Considering the procedural delay if it was to be done by the PWD, the committee suggested SmartCity do it on its own, she said.Since the company was a direct beneficiary of the road, it had an equal interest in the quality of the relocated road. The proposal would be adopted subjected to the approval of the director board of SmartCity Kochi.

Regarding the relocation and the reconstruction of the installations and structures of the electricity department, the recommendations evolved at the meeting would assume clarity only after the modalities were worked out.

SmartCity Kochi agreed to share the cost of reconstructing the dormitory complex and relocating the air quality monitoring station of the electricity department. However, the percentage of cost sharing between the stakeholders is yet to be decided, she said.

The committee recommended that the company reconstruct the dormitory on its own to avert any procedural delay. SmartCity Kochi refused to bear any cost on the relocation of the sedimentation tank and pump house, citing a legal advice it had received on the matter.

Dr. Beena said the committee would recommend exploring the possibility of relocating these facilities at the expense of the government. As per the estimate this would cost Rs. 42 lakh. She said it was highly “unlikely” that the electricity department would bear the cost since its position from the very beginning was that it should not be overburdened.

The Collector said there would be ample time to relocate the facilities, as the construction in the area where they were being positioned would be taken up only at the fag end.

While SmartCity disagreed over the estimate of Rs. 1.04 crore for the reconstruction of the dormitory complex, it accepted the estimate of Rs. 3.40 lakh for the relocation of the air quality monitoring station.

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