Thiruvananthapuram: The government is considering returning the investment made by TECOM in the SmartCity project to avoid legal complications. The decision is taken based on legal advice. Given that the Kochi SmartCity project has yet to achieve its intended goals, the government feels that any additional legal disputes could further delay the utilisation of project facilities. The government also believes this move will help maintain a positive perception of the state's business environment.

However, despite clear initial evidence regarding TECOM's shortcomings while fulfilling the contract, the government's decision to provide compensation has led the opposition to allege corruption. The contract clearly outlines the measures to be taken in case of contractual breaches, including recovering compensation from TECOM. 

It also specifies that if the company fails to complete the project within the stipulated time frame, a notice should be issued, followed by actions such as share acquisition if the issues remain unresolved. However, reports suggest that the government did not follow these procedures. This hesitation stems from concerns that legal action highlighting TECOM’s failures could backfire. This is also why the government showed no interest two years ago when TECOM attempted to withdraw from the project.

PAC report highlights lapses
The Comptroller and Auditor General (CAG) had pointed out that the inability to take legal action or claim compensation from TECOM for failing to complete the project on time was due to the absence of clear terms in the contract. The same issue was highlighted in a report submitted by the Legislative Assembly's Public Accounts Committee (PAC) in 2022.

Interest from major players to take Over
Industries Minister P. Rajeevs said that the land would remain under direct government control. Reports indicate that major players have shown interest in utilising the land and buildings allocated for the SmartCity project for IT development. If merged with Infopark, more companies could be accommodated, creating additional opportunities.