SmartCity got undue favours at every stage: CAG

No opportunities given to other players in the field

July 09, 2014 10:20 am | Updated 10:20 am IST - THIRUVANANTHAPURAM:

The Comptroller and Auditor General of India (CAG) has said the government has given “undue favours at every stage” to the SmartCity project in Kochi, which was conceived as an Information Technology (IT) township in the joint sector, with the Dubai-based TECOM Investments Private Limited as the major partner.

In his report tabled in the Assembly on Tuesday, the CAG said there was lack of transparency right from the conceptualisation stage about the justification for a SmartCity and the need for creation of a Special Purpose Vehicle for executing the project.

The government’s IT parks—Technopark and Infopark—now provided jobs to nearly 60,000 people and were still pursuing new projects to boost IT industry.

The partner for the project was selected without giving opportunities to other players in the field and without considering the past record of the partner.

The government transferred 246 acres of land on lease to the SmartCity without properly assessing the land requirement and also committed itself to providing more land for the project in future, the CAG said.

Valuation of land

“The valuation of the land for fixing lease rent was much below as compared with the land value considered for registration of land of adjoining areas… Unlike the IT parks established by the government, the lessee was granted freehold rights over 12 per cent of the total area of land under their possession at any point of time. The agreement conditions [between the government and TECOM] in respect of creation of 90,000 jobs were diluted in the agreement.

The government nominee had only a minor role in the Board of Directors,” the report said.

The report further noted that the conditions in the Framework Agreement for the project were tilted in favour of TECOM.

While legal action was possible against the government for any default in providing infrastructure, it was not possible against the TECOM for any default on their part.

No jobs created

The CAG noted that even after seven years of signing the agreement, the SmartCity’s commitments on constructing 8.8 million square feet of built-up space and creating 90,000 jobs were far from sight.

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