Smart City: LDF govt gave concession of over Rs 1000 Crore

The LDF government that boasts of having inked a ‘mutually beneficial agreement’ on the Smart City project in Kochi has granted concession worth more than Rs 1000 crore in terms of price of land.

The LDF government, when it reinitiated the talks with TECOM over the Smart City project, was repeatedly saying that the proposed land would be leased on par with the market value of the land. TECOM need not expect any concession, it said. Chief Minister V.S. Achuthanandan still sticks to his earlier allegation that TECOM is a real estate agency.

Despite the repeated querries by Opposition leader Oommen Chandy, who still stakes claim over the Smart City project, the Chief Minister finds nothing serious in the questions raised by the Opposition leader. Chandy’s efforts to expose the pitfalls in the deals fell flat as the Chief Minister refuses to take the bait.

Chandy need not to wait for a reply from the Chief Minister, if he really wants to know how much concession the LDF government has given to the “real estate agency”. The price of the 246 acres of land, as assessed by the Achuthanandan government, can be traced in the final agreement inked on Sunday.

It is clearly stated that the advance lease premium paid by TECOM for 88 percent of the total 246 acres of land was Rs 91.52 crore. As per the agreement, “To terminate the lease and buy out the entire shareholding of the TECOM at a price to be determined by an independent valuer taking the value of the land as Rs 91.52 crore, which is the advance lease premium paid by the SPV to the GoK for 88 percent of the land”.

If the words of Chief Minister V.S. Achuthanandan is to be believed, he handed over the land after claiming its market price from TECOM. While analysing the market value, the value of the land in Kakkanad area in Kochi is not less than Rs 5 crore per acre.In that case, the value of 246 acres of land will be Rs 1126 crore. Even if the claims of Achuthanandan, when he was the Opposition leader, alone to be considered, the price of the land should have been at least Rs 861 crore. It may be remembered that he had claimed that the value of land in Kakkanad was Rs 3.5 crore per acre.

Contrary to the LDF demand just a year ago, the new agreement on Smart City also promised all kinds of incentives to the Smart City and companies working in it as per the IT Policy.It would be even subject to the approval of Smart City. According to the agreement, “GoK shall issue all notifications and pass such orders or make such rules or regulations as may be necessary to ensure that Smart City shall be the recommending agency for release of all subsidies, and, or incentives to which the Units established by the entrepreneurs within Smart City are otherwise eligible or may be eligible from time to time”.

The smart enough IT department has deliberately delayed the announcement of IT Policy, so that the allegations over the incentives to be given to Smart City as per the policy would not come up.

The list of contradictions and the loss of the state does not end here, even as the CPM and its allies try to spread a feel that the agreement was the best one that safeguarded the interest of the state.

Of course, unlike many other such contracts in the past, the party and the Chief Minister are in a safer position.None who is alive now will be living to tell the tale after 99 long years.