Smart City final contract to be signed in March

Kerala will have 9 per cent equity stake in the project

The final contract for Smart City, the flagship IT project of Kerala, will be signed by the second week of March, 2006, most probably on March 10, according to PH Kurien, secretary, state industries and IT.

Talking to Business Standard, Kurien said that the next Cabinet might consider the draft agreement for the project and signing would be before the middle of March. He said that since the finance department was busy with the presentation of the budget for 2006-07, the clearance was delayed slightly. "Now, things are fine and the agreement will be signed soon," he added.

It is inevitable for the government to sign the agreement by the middle of March as the election schedule is expected to be announced by the election commission any time after 15th March. If the election is announced, the government would have to postpone the signing of the agreement which would be a serious blow to the UDF.

The MoU of the project was signed in September 2005 and the chief minister had announced that the final agreement would be signed within three months. But it has not materialised so far. One of the major thrusts of the election campaign of the UDF would be the Smart City project as it envisages employment opportunity for 33,000 in the first phase. The project has now become a political agenda rather than an economic issue as both UDF and LDF are trying to use the economic development of the state as their main plank.

LDF has questioned the validity of some of the conditions like the leasing of buildings and the 62.5 acres of land of Info Park situated at Kakkanad near Kochi. But UDF is hitting back at LDF accusing it of sabotaging one of the most prestigious IT projects pointing out flimsy reasons.

Meanwhile, the Kerala high court has directed the government to seek its approval to sign the agreement. Kurien said that this would not be a problem at all as the government would seek the necessary approval from the court. One of the prestigious IT projects of Kerala - Smart City - will be a joint venture between Dubai Internet City (DIC) and the state.

The government will have 9 per cent equity participation in the joint venture company by virtue of giving 100 acres of land to DIC, which envisages a total investment of Rs 1,500 crore for developing the most modern IT station in India. It can accommodate a chunk of IT majors of the world like Microsoft.

The government will provide the basic infrastructure for the project and seek the status of special economic zone for the project. DIC also insists on SEZ status and is now in a bargaining mood as government has the political commitment to sign the agreement before the announcement of the election schedule.