Smart City to clip Kochi Corporation wings

SPV will have most powers leaving local body only to raise equity

KOCHI: The euphoria over Kochi in the 20 cities selected by the Ministry of Urban Development for the Smart City project may turn out to be a short-lived affair if the fineprint connected with the functioning of the Special Purpose Vehicle (SPV) to be formed for implementing the project is any indication.

A document issued by the Ministry of Urban Development (MoUD) on the formation of the SPV, its financials and functioning make it clear that the elected Kochi Corporation will not have much role other than raising its share of capital for the project.

The 43-page document comprising guidelines for the project makes it clear that the SPV, to be formed under the Companies Act 2013, will be the decisive authority of the project.

The Chief Executive Officer, to be appointed with prior approval of the MoUD, will control day-to-day functioning that included, formulation of projects, awarding contracts, HR policy and appointment and removal of senior management of the company.

“The CEO will be appointed for a fixed term of three years and will be removed only with the prior approval of MoUD”, the document stated.

The section dealing with the delegation of powers to the SPV makes it clear that the power of the municipal council should be delegated to the SPV besides transferring the decision making power of the corporation to the CEO of the SPV.

It has described primary reason for the creation of an SPV is to “ensure operational independence and autonomy in decision making and implementation”.

To achieve the same it has asked the state government and the corporation to transfer the regulatory authority vested with them to the SPV.

Delegating the rights and obligations of the municipal council with respect to the Smart City project to SPV and delegating the decision making powers available to the ULB (Urban Local Body) under the municipal act and government rules to the CEO of the SPV are the two crucial requirements under the project.

The SPV will be having a board comprising representatives of union government, state government, corporation and independent directors.

( Source : Deccan Chronicle. )
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