The Congress-led UDF came down heavily on the Kerala government on Thursday for its decision to approve the Dubai-based TECOM's exit from the Smart City Project in Kochi through a mutual understanding, alleging the move was "mysterious".

Leader of Opposition in the Assembly, V D Satheesan, alleged that it was a purported decision by the government to hand over the 246 acres of land, which cost crores of rupees, to its favoured individuals.

The Congress leader further claimed that a real estate agenda was behind the government’s move.

"The government must explain why the project failed and should convince the people why it has backtracked from the project," he demanded.

Satheesan said that the first phase of the Smart City project was inaugurated during the tenure of former Chief Minister Oommen Chandy.

"In 2016, an IT tower spanning 6.5 lakh sq ft was completed as part of the first phase. However, the CPI(M)-led opposition at the time boycotted the inauguration ceremony," he alleged.

The cabinet meeting chaired by Chief Minister Pinarayi Vijayan on Wednesday decided to accept the recommendations submitted by a Chief Secretary-headed panel to resolve the issues connected with the Smart City project in Kochi.

Discussions will be held with TECOM to formulate an exit policy through mutual understanding as per the cabinet decision.

An independent evaluator would be appointed to calculate the amount of compensation payable to the TECOM, the CMO statement said.

A panel comprising IT Mission director, Infopark CEO and the managing director of Overseas Keralites Investment and Holding Limited would be entrusted with the task of submitting recommendations to the government in this regard, it added.

The Smart City project had been envisaged as a joint venture between the Kerala government and Dubai's TECOM investments.

Satheesan accused the state government of sabotaging a project capable of generating employment for over 90,000 people.

"Paying compensation to TECOM indicates lapses on the part of the government. What has been happening over the past eight years? There has been no coordination or monitoring from the government’s side," he said.

Congress leader Ramesh Chennithala also accused the government of "corruption" behind the decision.

"Instead of paying compensation, the state government should take action against TECOM for failing to utilise the 246 acres of land allocated for the project," he said, calling for the cancellation of the cabinet decision.

Meanwhile, Industries Minister P Rajeeve clarified that the government has not abandoned the Kochi Smart City IT project.

"The land in Kochi will be fully utilised under the direct supervision of the state government," he told reporters in Mumbai, responding to the reports suggesting the project’s termination.

Rajeeve said that the government plans to allocate the land for the benefit of hundreds of IT companies awaiting space in Kochi.

The minister alleged that TECOM has not made significant investments outside Dubai. "Investors need not be concerned as the project will not be abandoned," he assured, and added that a government-appointed committee would determine the compensation for TECOM.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.