People's Democracy

KERALA

LDF Govt Successfully Renegotiates Smart City Project

E Rajesh

THE Kerala government approved the general terms of the agreement to be signed with Dubai Technology and Media Free Zone Authority (TECOM) for the establishment of the Smart City project in Kochi, which is expected to give a tremendous boost to the state as an IT destination. Putting an end to all speculations existing hitherto, the LDF government cleared the way to reach a final accord for the dream project that would give a facelift to the IT industry scenario in the state. The LDF government has once again proved its credentials as a popular regime that uncompromisingly safeguards the interests of the state and its people. It is a moral victory for the Left Democratic Front for making the TECOM, the promoters of the Dubai Internet City (DIC), to agree to all its demands on Rs 1,500 crore Smart City Project.

The agreement that was proposed during UDF regime had evoked severe criticism among the people because of the clandestine nature of the memorandum of understanding (MoU) signed by the then chief minister Oommen Chandy. The Congress-led United Democratic Front (UDF) government's attitude was to succumb to all the demands of the company without even taking note of the reservations made by the opposition. When the LDF, especially CPI(M), staunchly opposed the blatant submission of the Oommen Chandy government to the TECOM demands, its leaders were blamed of missing the 'last bus of development'. The media were in the forefront depicting CPI(M) as ‘dogmatic’ and having ‘outdated perspectives’. It was propagated during assembly election that if the LDF government came to power, the IT project would be shelved forever. Notwithstanding the spate of propaganda unleashed against the Front and its leaders for the alleged ‘anti-development stance’, the CPI(M) took a firm position that the state's assets would in no way be allowed to be sold out for the business interests of foreign entrepreneurs.

Under the agreement that got a nod from the cabinet now, the project would be set up on 246 acres of land that the government would give to the DIC on lease for 99 years for Rs 104 crore. During the UDF government, it was agreed to provide 236 acres of land for Rs 26 crore and the complete authority of the land was to be vested with the company.

Contrary to the previous commitment of nine per cent share to the state, the LDF government would initially get 16 per cent of the share in the company to be formed for the implementation of the project. This share would be increased to 26 per cent after five years. The UDF government had agreed to have only one membership for the government in the board of directors of the new company. Instead, the government would now have the chairmanship and a board of directors membership in the company. In addition, when the share reaches 26 per cent after five years, the government would get three members in the board of directors.

Turning down the previous demand agreed by UDF government, the LDF government and the TECOM reached an agreement that the authority would not have any monopoly in IT investments, either in Ernakulam district where the Smart City is to be situated, or outside. As per the previous government’s proposal, no other government-supported IT-related project would be developed either in Ernakulam or in the neighbouring districts.

Giving a big boost to the principled stance of the LDF, the authority proposed to create 90,000 jobs in place of the 33,000 jobs agreed when the UDF government negotiated the agreement. This would be in addition to the jobs at the Infopark, which would remain with the government along with its auxiliary facilities. The then chief minister Oommen Chandy had insisted that without committing to give up the stake in the already developed Infopark (which is having Rs 35 crore-worth government investment in it) DIC would not agree to come to Kerala with the Smart city Project. According to the new agreement, it has also been agreed that 70 per cent of the land would be utilised for the IT and IT-enabled services. If this condition was not met, the land would be reverted to the government.

Even after the LDF government came to power and started renegotiating the deal, the Congress-led opposition had been alleging that the government was putting up ‘unrealistic demands’, and flayed the government for delay in signing the agreement. The government didn’t make any hurry, but deliberated with the company on all issues in detail and made the company agree to most of its demands. Now, when the TECOM agreed to almost all the demands made by the LDF government, what becomes obvious is that each and every reservation and opposition raised by the CPI(M) and the LDF earlier were resonant of the interests of the state. It also becomes crystal-clear that if such a resistance was not mobilised during the tenure of the UDF government, it would have resulted in a loot of state’s land and assets at the hands of the corrupt regime during the UDF rule.