Details of new lease agreement for Kochi SmartCity signed on 23 Feb 2011

After about 5 years of discussions and uncertainties, Government of Kerala and Tecom Investments reached on an agreement to proceed with the Kochi SmartCity project.

A new lease agreement was signed on 23 Feb 2011 after the Director Board meeting of Kochi SmartCity Infrastructure Pvt Ltd. The new lease agreement was signed by Kerala IT Secretary Mr. Suresh Kumar and Tecom Investments CEO Abdullatif AlMulla, in the presence of Kochi Smartcity chairman minister S. Sharma.

Land for SmartCity

There are 246 acres of land allotted for the SmartCity project. The lease agreement is signed as 2 separate properties:

Lease agreement 1

Land area: 131.41 acres

Property is in Kakkanad village

Document number: 486

Lease agreement 2

Land area: 114.59 acres (100.65 acre in Puthencruz village, 13.94 acres in kakkanadu village)

Document Number: 486

Free hold rights in 12% of this property, after completion of the master plan

133 acres of land already recieved SEZ status. However, during the survey it was found that there is only 131.41 acres of land in that property, which is now changed in the new lease agreement.

Highlights of lease agreement

Kerala IT Secretary Sureshkumar will go to Delhi today itself along with Tecom representatives Mithun Beeru and Adv Muhammde Tariq to speed up efforts to get SEZ status for the rest of the land.

Master plan will be prepared within 30 days

Lease amount will be Rs 1 per acre

Lease term is 99 years. However, it can be extended if both parties agree

If there is a failure to pay the lease amount, there will be 12% penalty.

Atleast 70% of the land should be used for IT related purposes.

8,88,207 sq ft should be used for building construction

Land can be sub leased to other companies

All important decisions must be done with the approval of the government representatives in the director board.

Construction would begin as soon as the Special Economic Zone notification was received for 131.41 acres, which had already been cleared by the Board of Approval of the Union Commerce Ministry.

Kerala government is responsible to get SEZ approval for the land.

Givernment approval should be obtained to use the land for any non IT purposes

Agreement will be void if the lease agreement terms or framework agreement terms are violated.

If the construction is not completed within the fixed timeframe, Government may give 6 months notice. If the construction is not completed within the notice period, Government can take over the SmartCity shares.

SmartCity CEO Mr. Fareed Abdul Rahman was not present in the board meeting due to difference of opinion with chief minister Mr. V. S. Achuthanthan.

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