The Kerala government's decision to compensate TECOM Investments for withdrawing from the SmartCity Kochi project has ignited a controversy. The opposition claims that the original agreement between TECOM and the state government allows for no compensation if the firm fails to meet its promises.
According to sources, the agreement states that if TECOM abandons the project, the state government can acquire the entire 84% stake held by the Dubai-based firm without paying any compensation. This is because the agreement only mentions that the state government shall acquire the shares at a consideration equal to the amount paid by TECOM to the government at the start of the project.
The SmartCity Kochi project was launched in 2012 with promises of generating 90,000 jobs and creating 8.8 million sq ft of space within 10 years. However, the project has faced numerous hiccups, and as of 2022, it has only created around 5,000 jobs.
The opposition has also raised eyebrows over the appointment of former SmartCity Kochi MD Baju George to the committee tasked with determining the compensation plan for TECOM. Critics argue that this appointment raises conflict of interest concerns.
