Kerala - Kochi   

Confusion over freehold rights cost project dear

KOCHI: The inordinate delay in the implementation of the SmartCity Kochi project could have been avoided if a simple definition specifically clarifying freehold rights was included in the original framework agreement at the very outset.

While freehold rights over 12 per cent land to the promoters of the project finds a mention in the framework agreement, it was not clearly defined leaving it open to either party to interpret it in ways that suited them.

The government took the stand that freehold rights did not imply selling rights even as Tecom continuously fell back on the argument that freehold by default meant absolute right, including the right to sale. When the government countered that land within a Special Economic Zone (SEZ) could not be sold as per the country's SEZ rules, Tecom made the counter argument that they always wanted the land with freehold rights outside the SEZ.

SmartCity CEO Fareed Abdulrahman in his press conference held on December 31 even said that there was nothing called freehold within a SEZ.

Though the government eventually had its way, it had to wait for it till the fag end of its term. In hindsight, the government could have clearly specified that freehold rights did not entail selling rights in the framework agreement itself and that would not have left room for a dispute later.

According to government sources, Wednesday's talks still bestowed promoters with freehold rights, albeit with certain conditions. As per the understanding, 12 per cent land (29.5 acres) will be converted from leasehold to freehold once the promoters complete the master plan. Even then they would not be able to sell it, but directly lease it out entitling them to the benefits of leasing, sources said.

This arrangement could have been reached at the very beginning had it been clearly mentioned in the framework agreement. Close to four years need not have been wasted, reliable sources said.

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