Kerala–Tecom Dispute Over SmartCity Kochi Exit Continues Amid Legal Deadlock
The dispute between the Kerala government and Dubai-based Tecom Investment over the latter’s exit from the SmartCity Kochi project continues unresolved, more than a year after the State Cabinet approved an exit plan. Despite multiple discussions, both sides remain divided over the legal framework governing Tecom’s withdrawal from the flagship IT township.
While Tecom insists that its exit should be governed by the Indo-UAE bilateral investment treaty, the Kerala government maintains that the project is strictly bound by the Original Framework Agreement signed between the two parties.
To assert its position, the State government issued a notice to Tecom around a fortnight ago, alleging violations of the framework agreement. This came even as Tecom approached the Centre’s Inter-Ministerial Group, seeking recognition of the bilateral trade treaty as applicable to the project.
Meetings held at the Central level have failed to produce a breakthrough. A key meeting scheduled for January 7, 2026, involving senior State officials and Tecom representatives, was postponed. Tecom has also sought a mutually agreed arbitration venue, deviating from the framework agreement, which designates Kochi as the arbitration centre.
Impact Analysis
According to government sources, the notice cites violation of Clause 7.2.2, which required Tecom to develop 88 lakh sq ft of built-up area, with up to 70% for IT, and generate 90,000 jobs within 10 years. The government has termed the grounds cited by Tecom for its 2024 exit as weak and unconvincing.
If Tecom is found in default, the agreement allows the State to terminate the lease and buy out Tecom’s shares at a valuation determined by an independent evaluator, with land valued at ₹91.52 crore, excluding appreciation.
Future Outlook
The government opted for a mutually agreed exit to avoid prolonged arbitration under the Arbitration and Conciliation Act, 1996, which could leave valuable land unused for years. Currently, SmartCity Kochi hosts 27 IT and ITeS firms, supporting about 5,500 jobs, along with projects by co-developers.
Final Thoughts from TheTrendingPeople
The prolonged Kerala–Tecom standoff highlights the complexities of large public-private partnerships. As talks stall, the future of SmartCity Kochi hinges on whether legal rigidity or negotiated compromise prevails, with jobs and investor confidence at stake.