Kochi: a lesson on how not to do it

SmartCity Kochi, the most hyped, politically exploited and delayed project in Kerala, will have its first building opened by the middle of next year — maybe.

It will then be a full ten years since the Government of Kerala and Dubai Holding, the global investment holding company behind the Dubai Internet City, signed a memorandum of understanding on building a knowledge township. The township was to be built over 246 acres of land in a green valley caressed by a stream on the outskirts of Kochi. The government was to provide most of the land on a long-term lease and the knowledge township would have special economic zone status.

After long delays, dithering and doubts, work on the first IT building started early this year, seven years after the foundation stone for the project was laid. The 6.5 lakh square feet building, which will be the first in a cluster of buildings, will house ITC, media, finance and education companies. The first phase of the project is estimated to cost ₹350 crore.

The then United Democratic Front (UDF) Government, which signed the MoU with Dubai Holding in 2005, touted it as a massive development project that would change the face of Kochi, if not of Kerala. TECOM Investments, an arm created by Dubai Holding to build, manage and develop business parks, was to manage SmartCity Kochi. When all the phases were completed, some ₹1,500 crore would have been invested.

SmartCity Kochi was marketed as a dream project. But, in spite of the hype, the project limped. The UDF and the Opposition Left Democratic Front sparred over the project, with the LDF accusing the UDF government of giving undue concessions on land and other sops to TECOM. This got the project stalled. In May 2007, the then LDF Government reworked the terms and signed a fresh framework agreement with TECOM.

But, then the global recession started and threatened to turn Dubai into a pauper city. This left Dubai Holding cash-strapped, and the company, without saying it publicly, dragged its feet on SmartCity Kochi. A tiff also broke out between the government and TECOM over the freehold land rights, which crippled the project.

Dubai’s financial health began improving by 2011. In February that year, the dispute over freehold rights was resolved.

But, in spite of the State Government’s best efforts, TECOM could not get the project going. In November 2012, the government wrote to TECOM expressing its displeasure over the delay. Work finally began early this year. By this time, the Central Government had granted single SEZ status to the entire 246 acres.

The impact of the smart-city project on Kochi’s economy and politics has been phenomenal. Land prices shot up in the city and its suburbs. Political parties took advantage of the project. It was a campaign issue in two Lok Sabha elections, two Assembly elections and two panchayat elections in the central Kerala region.

However, with the launch of the ₹5,300-crore Kochi Metro Rail project as well as the rapid development of the government-run IT Infopark, the importance of the project as the development icon of Kochi has waned.