Dubai’s Indian Smart City project put on hold

Dubai Internet City’s (DIC) flagship Smart City project in India is on hold, Arabian Business can reveal. The US$350 million project, which was intended to establish a self-contained international hub of IT and biotechnology industries on the subcontinent, has been hit by a series of delays and missed deadlines.

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By  Andrew White Published  February 19, 2006

Dubai Internet City’s (DIC) flagship Smart City project in India is on hold, Arabian Business can reveal. The US$350 million project, which was intended to establish a self-contained international hub of IT and biotechnology industries on the subcontinent, has been hit by a series of delays and missed deadlines. An agreement between DIC and the Indian government was due to have been inked on January 31, yet the deal remains unsigned and DIC admitted it had “no idea” when a settlement might be reached. A spokesperson for DIC was unable to say when a deal might be struck, but conceded that the negotiations were highly unlikely to be settled this month. When asked if the project had been postponed until further notice, he admitted that this was “a conclusion you could naturally draw.” The Indian government continues to put on a brave face about Smart City, and insists that the project is proceeding as planned. Mr P.H. Kurian, from the Kerala Government’s Department of IT, claimed instead that disagreements over “minor issues” were to blame. “We have one or two more points to be agreed upon, and that should be over soon,” he said. “After that, it should take another week for formal approval by the government, then finally the agreement will be signed.” He also denied claims that the project is still facing local hostility from Kerala landowners and opposition political parties. The government is reportedly having difficulties evicting smallholders on land targeted for the project, and Communist Party politicians do not want the existing Infopark to be handed over to DIC, as the park already houses a number of IT companies and service providers. Under a Memorandum of Understanding inked in September last year, the Kerala government is to hand over to DIC the existing Infopark at a cost of US$25 million; 136 acres of land at US$60,000 per acre and another 100 acres of land on a 99-year lease, free of cost. Opponents of the Smart City scheme argue that this agreement represents a bad deal for the Kerala region — a claim that Kurian refutes. “Our government is determined to do this,” he said. “There is no political issue and the people of Kerala have accepted this now. It took a little time for the people to understand, but when the public wanted it, the opposition parties had to come down on their side. As a result, there is now no problem on the political front.” DIC had planned to provide 33,000 jobs in 10 years through the development. If it is unsuccessful, the firm has agreed to compensate Kerala at a rate of US$140 per job.

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