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IT minister's reservations hit Technopark phase III project

THIRUVANANTHAPURAM: Putting a big question mark on the future of Technopark phase III development, the state government has decided to put the Rs 1,200-crore project submitted and won by Taurus Investment Holdings through Swiss Challenge method in cold storage. With Monday's cabinet not discussing the project and not being included in the agenda of Wednesday's cabinet meeting, the fate of the ambitious project mooted by a group of young NRKs is now hanging in the balance as Taurus is seriously mulling to pull out if an MoU is not signed before Lok Sabha poll notification. Sources attribute the cold shoulder of the government to the project to the reservations of IT minister P K Kunhalikutty about offering the commercial component in the Swiss Challenge Bid submitted by Taurus and its partners Hansji Corporation and Rose Global, LLC. The project entails developing 2,500,000 sq ft of built-up space in Technopark phase III at a foreign direct investment of Rs 1,200 crore. "There was no need to hurry things," the industries minister told TOI hinting that there could be a retender to develop support facilities in 9.74 acres of non-SEZ (commercial) land. "Finance department had suggested that the lease period should be brought down from 90 years to 30 years and IT secretary is debating about on whether we should overrule it. Anyway, we have not taken final decision," he said. When asked whether the minister was questioning the veracity of the Swiss challenge bid, he said, "The Swiss Challenge is beneficial only to a single party. How can we hand over the land without a tender?" Image removed. Taurus' MD (Indian projects) Ajay Prasad said over the phone from Boston that his company had sunk in close to half a million dollars on the project and had also signed a Letter of Understanding with Hilton Worldwide to bring its Hampton brand to Technopark phase III, but cannot ask the company's international partners to park money on this project indefinitely. He also categorically ruled out the possibility of taking on the project without the commercial entity or even applying during retender. "The request for proposal clearly stated the components - it included developing commercial and IT space. We have utilized some 100 hours of our senior management on this project. Hilton has a dedicated group working on the project for the past six months. We wanted this to be the start of our India venture, but we cannot hold on to it indefinitely and lose face in front of our international partners. The Swiss challenge bid is a globally accepted process and engaged a very rigorous process of shortlisting," Prasad said. "Everyone but the industries minister seems interested in the project. Chief minister Oommen Chandy was very keen to showcase this as a success story from Emerging Kerala. Industrialists like V K Mathews and Nasscom and Gtech have been pushing for the project. Moreover, Technopark has run out of money and has some Rs 600 core of interest payment due to various projects. The Taurus' payment will be a real monetary life-line to Technopark," a source said. Hanging fire The original proposal for the Technopark phase III was made in January 2013 by Taurus Investment Holdings, a Boston-based global real estate investment and development firm It was decided to seek EoI from other players under Swiss challenge bid Inkel and Lulu Group showed interest in competing by presenting better proposals to challenge the Rs 1,200-crore bid by Taurus and sought an extension on the first bid-due date, September 24 Despite granting a one-month extension till October 24, 2013, they did not submit a proposal and Taurus was declared winner according to the Swiss challenge rules It has been four months since Taurus was shortlisted, but IT minister is yet to approve the signing of MoU with them   Govt raises doubts over Taurus bid THIRUVANANTHAPURAM: IT minister P K Kunhalikutty is learned to have expressed his reservations about granting the Swiss Challenge bid for the Phase III development of Technopark to Taurus Development Investment Advisory Pvt Ltd (TDAPL), Trivandrum. He is said to have stated that he noticed the involvement of middlemen in the deal. "The file pertaining to the project was forwarded to the chief minister's office with the minister's comments," according to a source in the CM's office. TDAPL is a wholly owned subsidiary of Taurus Investment Holdings, LLC. The Taurus group had put up an FDI proposal worth Rs 1,200 crore to develop commercial and IT buildings on 19.7 acres of land. The technical committee constituted by the Technopark project implementation board (PIB) had recently evaluated the bid and said Taurus qualified with 87 marks, the minimum requirement being 70. A government order (GO), dated May 17, issued by joint secretary for principal secretary to the government Thara Samuel to Technopark CEO Girish Babu had asked that the tender to develop Phase III be formulated in the Swiss Challenge model. The GO also gave Technopark PIB the authority to take a call on awarding the contract to the winning applicant. The order No 3020/A2/13/ITD reads: "It is advisable to put the proposal on Swiss Challenge so that opportunity can be provided to any other developer to submit a better proposal. I am to request that the Technopark PIB many formulate a suitable Swiss Challenge proposal and put the present proposal to challenge by other developers with the lease premium for the 9.74 acres of commercial space as a variable in the financial proposal. The Technopark PIB may also take a final decision after the present proposal is put on a Swiss Challenge." The same government which proposed the Swiss Challenge is now wary of it and suggested that a tender be called for awarding the commercial entity of the project. The IT minister, however, is said to have left the decision to award the IT unit comprising 10 acres up to the Technopark PIB. According to a highly placed government source, "Kunhalikutty's office was tipped off by UAE-based NRIs that a consultancy firm based out of Kerala, involved in doing some groundwork for Taurus, allegedly sent e-mails to high net-worth individuals and firms seeking an investment of around Rs 50 crores. The minister's reservation stems from the fact that the consultancy wrote emails to NRIs stating that it would own a stake in the project, and he did not want to encourage middle-men." Taurus Investment Holdings managing director (India) Ajay Prasad, who is spearheading the project, could not be reached for comments.