The Kerala government’s decision to approve Dubai-based TECOM’s exit from the Smart City Project in Kochi and reclaim the 246-acre plot allotted to it has drawn allegations of corruption from the Opposition.

The cabinet meeting chaired by chief minister Pinarayi Vijayan on Wednesday decided to reclaim the idle land and mutually end the 2011 agreement under which TECOM was supposed to set up an IT park and generate 90,000 jobs.

The first phase of the Smart City project — in which TECOM owns 84 per cent stake and the state government 16 per cent — was inaugurated during the tenure of former chiefminister Oommen Chandy.

The project was started as a joint venture between the Kerala government and Dubai Holding LLC — of which TECOM is a subsidiary — to develop an IT special economic zone (SEZ) in Kochi. It was implemented by SmartCity (Kochi) Infrastructure Pvt Ltd along the lines of Dubai Internet City, Dubai Media City and Dubai Knowledge Cityin the UAE.

Talking to reporters in Mumbai on Thursday, Kerala industries minister P. Rajeeve, however, claimed that the Left government was not withdrawing from the project. He said the vacant plot of land near Infopark in Kochi would be utilised to develop IT-enabled services, adding that more than 100 IT companies were waiting in queuefor space.

“There is a huge demand for land in Kochi. Our aim is to ensure maximum use of land for IT project developments,” he said.

The cabinet has decided that a committee appointed by the state government will take a call on the compensation to be given to TECOM.Rajeeve said the committee would comprise the Kerala State IT Mission director, the Infopark CEO and the managing director of Overseas Keralites Investment and Holding Ltd (OKIHL).

OKIHL MD Baju George’s inclusion in the committee has raised eyebrows because he had signed the Smart City project agreement during Chandy’s tenure.

This issue was flagged by Congress leader Ramesh Chennithala who said: “The interests of Kerala have been compromised by the chief minister. Minister Rajeeve speaks like an agent of TECOM. The prime property in Kochi is expected to be sold to the land mafia. I don’t understand why Baju George has been included in the committee entrusted to decide on the compensation amount. This reeks of corruption.”

“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.

Senior Congress leader K.C. Joseph, a Chandy loyalist, also echoed Chennithala.

“Once Chandy was voted out of power, the first Left government led by Vijayan did not take any serious steps to sustain the SmartCity project. It was a dream project of Chandy, which was executed well by him. Unfortunately, it cut a sorry figure and now the state government’s decision to reclaim the land is nothing but deplorable,” Joseph told The Telegraph.