Thiruvananthapuram: The Kerala Government's move to compensate Tecom, which was excluded from the Smart City project, has been labelled as a “scam” by Joseph C Mathew, former IT advisor in the V S Achuthanandan Government. According to the terms of the agreement, the government should have sought compensation from Tecom, he noted, adding that the contract signed by the Oommen Chandy Government was rewritten during V S Achuthanandan's tenure.

In the 2007 agreement signed during V S Achuthanandan's tenure with Dubai Holdings, the parent company of Tecom, it was clearly stated that the government was only obligated to pay compensation if the project faced delays due to issues on the government's part, such as electricity supply or land acquisition. However, if the delay was due to the company’s shortcomings, the government could seek compensation from them. The contract also specified a six-month notice period. The government’s current actions are in direct contradiction to these provisions. In a financially strained situation, providing compensation now would become an additional burden for the state.

The revised agreement, which was rewritten during V S Achuthanandan's tenure in 2007, included clauses regarding employment opportunities and building construction. The contract explicitly stated that the project must be completed within ten years. However, only ten percent of the project has been completed so far, meaning that the failure to complete the contract on time is a fault of Tecom.

Moreover, there has been no clarity on who will be given the 246 acres of land that was reclaimed. 

Opposition leader V D Satheesan alleged that the government's plan is to hand over the land to private owners. Congress leader Ramesh Chennithala also stated that action must be taken against Tecom, which had deceived the youth of Kerala for ten years, and that the Cabinet's decision is against the terms of the contract.

Thirteen years after the contract was signed, the lack of notable progress in the project led to Tecom's withdrawal, following pressure from the state government. The agreement to compensate Tecom for the money invested in the project, including construction costs, was reached at the government level. Tecom’s decision to withdraw came as a continuation of their stance to focus on projects outside the UAE.

The goal of the 2011 contract was to establish an IT township alongside the Kakkanad Info Park. However, for ten years, Dubai Holdings did not make any major investment in Kochi nor create employment opportunities as per the contract. Due to a lack of noteworthy attention to the project, several discussions took place between the government and Tecom regarding their withdrawal.