NRI consortium gives hope for Smart City Kochi project

Amidst widespread rumours regarding the state government withdrawing from the agreement on the Smart City project with Tecom, an Abu Dhabi-based NRI consortium has come forward eyeing the project.

With the Smart City project getting delayed for a long time, the state government is considering alternatives. The NRI consortium stands a better chance as the controversial clause of ‘freehold’ does not figure in their wish list.
Sources in the NRI team confirmed that they have already held a discussion in this regard with certain officials. The team plans to meet the state government officials and will communicate to the government that they are ready to invest according to the terms of reference set by the government.

Sources said the consortium has already consulted a firm experienced in setting up special economic zones (SEZs) in India. According to the firm’s advice, the consortium has decided to prepare a business proposal. A sum of `1 crore has been set apart to conduct a study with a firm called KPMG, in Abu Dhabi. A detailed feasibility report (DFR) will be prepared on various aspects of the project.
“When a Union Minister visited Abu Dhabi, the NRI team expressed its interest to invest in the Smart City project if the agreement between the state government and Tecom does not work. It was based on the minister’s instruction that we contacted the office of Registration Minister S Sarma and the SEZ office in Kochi. We have already formed a core group to deal with the project,” sources in the Abu Dhabi team told Express.

According to the initial concept, the draft report will be prepared by March 2011. “We need to identify a co-developer. The financial model will be finalised by May 2011 and a potential financial partner will be identified. A report will be submitted to the state government by June 2011. The land acquisition will be made by the end of the year,” the sources said.

The team is planning a public issue of shares through the stock market. The project cost has been fixed at `2,100 crore, of which half the amount will be bank loans. The team is looking for development without sales rights.
The concept began when some of the members of the consortium met at an alumni meet in Kerala.
“We communicated with others who had similar interests. A company has not been registered yet as we are planning to take a final decision after the feasibility study,” sources said. A final picture on the initiative taken by the consortium will be made by June 2011.

Highly placed sources said two business magnates from Kerala who have already established vast business networks in India and abroad are also behind the initiative.

With discussions between the government and Tecom reaching a dead end, the NRI consortium is hopeful of taking over the project.