Kochi SmartCity: Contrary to CM's claims, Kerala to compensate Tecom

Thiruvananthapuram: Contrary to Chief Minister Pinarayi Vijayan's official documents reveal that the company will, in fact, receive compensation from the Kerala government upon its removal from the Kochi SmartCity project.

The CM's claim at the December 9 press meet that Tecom would only be given the price of its share and not compensation appears to have been an attempt to obscure significant lapses in the project's contractual agreements. However, letters from Tecom to the state government and notes recorded by government officials across various files clearly indicate that the payment was indeed compensation.

The decisions by the Chief Secretary-led committee and the state cabinet further confirm the intent to provide compensation. Based on a cabinet decision, an order issued by the IT Secretary on December 5 explicitly states that an independent evaluation was initiated to determine the compensation amount for Tecom. Interestingly, the Chief Minister's assertion that the payment to Tecom was not compensation came only after the issuance of this order.

The government's decision to withdraw from the project and compensate Tecom violates the original contract and results in a missed opportunity to resolve long-standing issues. As a result, the state should now reimburse Tecom for 84 per cent of its shares in SmartCity and compensate it with several crores of rupees.

A letter from Dubai Holding Managing Director Khalid Al Malik to the state government in 2022 revealed that Tecom had invested approximately 14.2 crore UAE dirhams (Rs 329.15 crore) in the SmartCity project for construction and related expenses. Based on this letter, the government has decided to exclude Tecom from the project by compensating the company.

CM's statement on December 9
Chief Minister Pinarayi Vijayan clarified the government's position: "The government intends not to send Tecom away by offering compensation. Instead, what is being refunded is the price of the shares Tecom purchased in the SmartCity project. This situation arose due to Dubai Holding's decision in 2017 to wind up its operations outside Dubai. There is a widespread misconception that the refund of the share price is compensation. However, what is being provided to Tecom is strictly a reimbursement for its 84 per cent stake in the SmartCity project."

"Let me emphasise that we are not offering any compensation to Tecom. The valuation of Tecom's investment in Smart City will be determined through an independent assessment, and the final amount to be reimbursed will be decided after due consultations and discussions," he added.