Another hold back for delayed KochiSmart City project

The already much delayed Rs.15 billion ($375 million) information technology park, the Smart City project, in the state's industrial hub Kochi, received a further jolt Wednesday when the Kerala government changed its stand once again on the project's Special Economic Zone (SEZ) status.

The project, being implemented jointly by the Kerala state government and Dubai Internet City (DIC), was supposed to come up according to the rules and guidelines laid down in the agreement between DIC and the state government.

According to central government regulations, SEZ projects in Inda are entitled to a number of tax benefits and easier regulations.

The Kerala government, however, has declared an SEZ policy which is more restrictive than the central government norms and a state minister Wednesday said these more stringent norms will now be applicable to the Smart City project.

The state's Chief Minister V.S. Achuthanandan had, however, said last month that the state government's SEZ policy would not be applicable to the Smart City project.

Yet, Wednesday this stand appeared to have been reversed when the state's parliamentary affairs minister M. Vijayakumar told the state assembly in reply to an opposition question that the state SEZ policy would be applicable to the Smart City project as well.

'Kerala has floated a policy guideline with regard to SEZs and that would be applicable to Smart City project like it is applicable to the 10 new applications for SEZs that have been cleared by the state government and forwarded to the Centre,' Vijayakumar said.

At a post cabinet meeting briefing here last month, Achuthanandan and the state fisheries minister S. Sarma, who is also the chairman of the project, had said that the new SEZ guidelines would not be applicable for Smart City.

Instead, the rules and guidelines laid down in the agreement between DIC and the state government would be followed.

When Vijayakumar reversed this stand Wednesday, the entire opposition was on its feet demanding an explanation from Achuthanandan.

To wriggle out of the situation, Achuthanandan, said that the opposition need not expect a reply from him in the manner in which they want.

Soon the entire opposition was on their feet but Speaker of the assembly K. Radhakrishnan cooled down tempers and said that all issues could be looked into during the course of the assembly session.

The project would have 8.8 million square feet of built-up space, of which 70 percent would be for information technology and information technology enabled services and would employ 90,000 professionals.

The project is now at the crossroads with nothing happening after the foundation stone was laid a year back.

The Dubai team is upset that for the project's first phase, only 136 acres of land was granted SEZ clearance last year and the remaining 100 acres is yet to get the clearance.

Another grouse they have is that the state government has still not given any concession to them with regard to registration and stamp duties on land transactions.

The conditions for SEZ that has been cleared by Kerala's Left coalition government include: no agricultural land will be acquired for SEZs; land will not be acquired for sanctioning SEZs in the private sector; no rebates will be allowed for electricity; Panchayati Raj rules will be applicable; tax holidays will be there only for 10 years; 70 percent of the land will have to be used for industrial purposes and the balance 30 percent for residential apartments; and no apartments can be sold to outside parties.

All labour laws prevailing in the state will also be applicable to these SEZs.

With Smart City's fifth board of directors' meeting scheduled for next month, all these issues are likely to come and it remains to be seen what stand the government will take in that meeting.

Source