HDIL says it will not exit Cybercity project in Koch

[Editor: You can go Full Hog in IT (Information Technology) counters, as the INR is going to oscillate between Rs.54-57, against the USD for some more time. Indian Rupee (INR) is also expected to depreciate against the Euro.  However, try only those IT companies who have large overseas business; but NOT likes of Rolta Ltd or Tera Software Ltd]

The Housing Development and Infrastructure Limited (HDIL) claimed on Thursday that it was not exiting the Cybercity project in Kalamassery despite the company putting out an advertisement on Wednesday for either a joint venture partner or for outright sale of the 70 acres it bought from Hindustan Machine Tools, Bangalore, in 2006.

CEO for the Cybercity project, K.V. John, told The Hindu from Mumbai that there appeared to be some confusion over the advertisement and that HDIL was not exiting the project as had been made out in the media.

He said that HDIL is ready with the master plan for the project and is on the lookout for a joint venture partner get going. He did not explain why the project, work on which was to start in February 2011, had not taken off so far.

A spokesman for HDIL in Mumbai reiterated that company was looking for a joint venture partner as its first option. Hariprakash Pandey, vice-president, investor relations and finance, told The Hindu from Mumbai that HDIL’s first option was to find a joint venture partner. Bu if a company wanted to partner HDIL and sought a major share in the venture, HDIL was open to selling the land.

HDIL was now focussing on projects in and around Mumbai and there was nothing Kochi-specific in its move. The company had also put up its property in Hyderabad, Pune and Noida for either sale or joint venture partnership, said Mr. Pandey.

The Cybercity project, which was held up as the first integrated IT hub in the State on the lines of SmartCity, was meant to host hundreds of back offices and software development units in an integrated fashion and spread over one millions sq.ft. of space in the first phase. It was touted to provide 60,000 jobs and involve an investment of over Rs. 2,000 crore.

However, work on the project never got going despite its launch in 2008 by the then Industries Minister Elamaram Karim, who famously said that businesses could not be set up on coconut trees. He was responding to a raging controversy over the sale of government land cheaply to private entrepreneurs.

The high decibel controversy saw the then Chief Minister V.S. Achuthanandan keep away from the inauguration of the project, the task then being taken up by Mr. Karim, who on Thursday defended the land deal.

The 70 acres was sold for Rs. 91 crore and HDIL stands to gain immensely with the land rates being five times that amount in Kalamassery now.

Mr. Karim claimed that the land was sold on the condition that it would be used only for industrial purposes. The UDF government must show the will to ensure that this condition is followed, he said. He claimed that there was nothing wrong in the 2006 deal in which HDIL’s subsidiary Bluestar Realtors Private Limited bought the land from HMT through an open bid in which the company was the highest bidder.

Meanwhile, the HMT Employees’ Union (CITU) has decided to move the court to prevent the land sale. The union will also use other means to thwart HDIL intentions, said its secretary Satheesh Kumar.

However, there appears nothing that might prevent the debt-ridden HDIL from selling off the land to raise revenue. HDIL’s financial results for 2012-13 showed that its consolidated debts stood at 4,018.83 crore. The company has also recorded Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) at Rs.712.23 crore for the year 2012-13.

A legal expert here said that the HMT land was exempted from Kerala Land Reforms Act 1963 and that the government-owned company had carried out an outright sale. V.D. Satheesan, MLA, who raised the issue in the State Assembly, was of the same view.

Courtesy: The Hindu