The Hindu : Kerala / Thiruvananthapuram News : Government drafts MoU for Smart City project

Online edition of India's National Newspaper
Friday, Jul 08, 2005

Kerala

Kerala - Thiruvananthapuram

Government drafts MoU for Smart City project

Special Correspondent

THIRUVANANTHAPURAM: The State Government has drafted a memorandum of understanding (MoU) to be signed with the Dubai Internet City (DIC) for the proposed Smart City project in Kochi suburbs and the same has been sent to the DIC for its approval.

According to the MoU, a copy of which was obtained by The Hindu , the Smart City and the companies operating from its campus will create 33,000 jobs in phases over a period of 10 years (5,000 jobs by the fifth year, 10,000 jobs by the seventh year and 33,000 jobs in all by the 10th year).

This is in return for 100 acres of land being given to the DIC at a nominal price of Re.1 an acre. The transfer of land is, thus, not a free affair, but a transaction purely in the nature of outright sale.

If the promised jobs do not materialise, the `special purpose vehicle' (SPV), being set up for executing the Smart City project, will pay the Kerala Government a penalty of Rs.6,000 for each job that falls short of the target on the fifth, seventh and tenth year.

"The methodology for calculating the shortfall in the number of jobs will be determined by the parties in good faith negotiations and in consultation with, and on the approval of, DIC's appointed Indian legal counsel," the MoU says.

The MoU commits the Government to acquiring 136 acres of additional land and transferring it to the SPV at a price of Rs.26,47,058 an acre.

Transfer of property

Another commitment is to transfer the Government property comprising the Infopark and 62.27 acres of its land to the SPV for a total consideration of Rs.109 crores. The amount includes approximately Rs.16.9 crores of ongoing works at the Infopark that the Government will have to settle directly with the contractors.

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