Smart City: Last minute clause revision frees Tecom from job creation obligation
By modifying the clause to include only a best-efforts commitment, Tecom was effectively absolved of any binding obligation to generate the promised jobs.
By modifying the clause to include only a best-efforts commitment, Tecom was effectively absolved of any binding obligation to generate the promised jobs.
By modifying the clause to include only a best-efforts commitment, Tecom was effectively absolved of any binding obligation to generate the promised jobs.
Thiruvananthapuram: Amid concerns over the state government's decision to compensate the Tecom Group before removing it from the Kochi Smart City project, it has come to light that a last-minute clause added to the project contract relieved the Dubai-based company of its obligation to generate job opportunities.
This stipulation, originally part of the contract drafted during the Left Democratic Front (LDF) era, was mysteriously dropped just before the contract was signed. The initial draft, prepared by then IT Secretary KR Jyothilal, required Tecom to generate at least 90,000 jobs within ten years of the project’s operation.
However, before signing the agreement in 2007, this clause was altered to state that Tecom 'shall make best efforts to generate jobs,' a change made with a simple pen mark.
By modifying the clause to include only a commitment to best efforts, Tecom was absolved of any binding obligation to generate the promised jobs. As a result, no action can be taken against the company for failing to fulfil this contractual assurance.
The reason for dropping the clause at the last minute was that Tecom, being primarily a real estate company, was unable to meet the job creation requirement. Despite a legal opinion from the Advocate General in 2010 against removing this clause, no corrective action was taken.
The Accountant General’s audit also flagged the removal of this clause as a significant issue. This change left Tecom with only one potential violation: its failure to complete the 88 lakh square feet of built-up space within the agreed-upon time frame.
Another crucial requirement waived off!
The Memorandum of Understanding (MoU) prepared during the tenure of the Oommen Chandy government included another stipulation that required the project to be completed in three phases, with a specific number of jobs guaranteed at each stage.
If these jobs were not created, the developer would be liable to pay Rs. 6,000 for each job not generated. However, this clause was also dropped during the tenure of the subsequent government led by VS Achuthanandan, further diluting the project developer’s accountability.