Infrastructure Tender
Kerala Floats ₹1,100 Crore EPC Tender for Palakkad Smart City First Phase
The Kerala Industrial Infrastructure Development Corporation (KINFRA) issued a release on Wednesday saying that tenders have been invited to develop infrastructure in the Puthussery Central and Kannambra areas of the Palakkad Smart City (Integrated Manufacturing Cluster). The first-phase package, estimated at ₹1,100 crore, is targeted for completion within four years.
| First-phase tender value | ₹1,100 crore (base estimate) |
|---|---|
| Land covered | 1,400 acres (already acquired) |
| Project areas | Puthussery Central and Kannambra |
| Contract type | EPC (Engineering, Procurement, and Construction) contract, encompassing design, construction, and maintenance |
| Completion timeline | 4 years from tender award |
| Development authority | Kerala Industrial Corridor Development Corporation Ltd. (KICDC), a special purpose vehicle (SPV) jointly formed by the National Industrial Corridor Development and Implementation Trust (NICDIT) and the Government of Kerala |
| State land investment (so far) | ₹1,489 crore for land acquisition |
| Central government infrastructure share | ₹1,789.92 crore in infrastructure development |
| Equity tranches released | December 2024: 110 acres and ₹104.5 crore; March 2025: 220 acres and ₹209 crore |
| Total project investment | Approximately ₹3,600 crore |
What Was Announced
KINFRA issued a release on Wednesday saying that tenders have been invited to develop infrastructure in the Puthussery Central and Kannambra areas of the Palakkad Smart City (Integrated Manufacturing Cluster). The first-phase package, estimated at ₹1,100 crore, is targeted for completion within four years and covers development activities on 1,400 acres of already acquired land.
Announcing the development, Kerala Industries Minister P. Rajeeve stated that tenders have already been invited for multiple infrastructure components, with the execution slated for completion within four years.
Infrastructure Scope
Key infrastructure components of the project include internal roads, drainage systems, bridges, water supply networks, fire-fighting systems, water reuse systems, sewer lines, power distribution systems, a sewage treatment plant, an industrial effluent collection system, and an effluent treatment plant.
The scope of work includes the development of internal roads, drainage systems, bridges, water supply and firefighting systems, wastewater recycling units, a sewage treatment plant, and a power distribution network. Additionally, bids will soon be invited for the construction of the Integrated Command and Control Centre, landscaping, and other key urban infrastructure.
Funding and Land Transfers
The project is backed by the Kerala Infrastructure Investment Fund Board (KIIFB), through which the state has invested ₹1,489 crore for land acquisition. The Central government is expected to contribute ₹1,789.92 crore in infrastructure development, with funding to be released in phases corresponding to land handovers.
In December 2024, the first tranche of equity—comprising 110 acres of land and ₹104.5 crore—was transferred to the SPV by the state and central governments. In March 2025, the second tranche was disbursed, including 220 additional acres of land by KINFRA and ₹209 crore from the Centre.
Governance Structure
The implementation of the project will be managed by the Kerala Industrial Corridor Development Corporation Ltd. (KICDC), a special purpose vehicle (SPV) jointly formed by the National Industrial Corridor Development and Implementation Trust (NICDIT) and the Government of Kerala. Both entities hold an equal equity stake in KICDC.
The Palakkad node is part of the broader Kochi–Bengaluru Industrial Corridor, which was conceived in August 2019 as an extension of the Chennai–Bengaluru Industrial Corridor. Kerala began implementing the project in September 2020 with equal partnership from the central and state governments.
Project Status and Next Steps
The master plan and Detailed Project Report (DPR) for the Smart City have been completed. The tender invitations marked a significant milestone in moving the project toward active construction phase.
The goal is to position Palakkad as a vital industrial and logistics hub within the Kochi-Bengaluru Corridor, enhancing Kerala's role in national economic development. Once operational, the Palakkad Smart City is expected to catalyse industrial growth, generate employment, and improve regional connectivity, firmly anchoring Kerala in India's growing network of smart industrial zones.
Update: EPC Contract Award (September 2025)
Kerala completed the tender process for the infrastructure development of the Palakkad Smart City, the first node in the Kochi-Bengaluru Industrial Corridor. The construction contract was awarded to a joint venture between Dilip Buildcon Limited and PSP Projects Limited, valued at INR 1,316.13 crore (USD 158 million, including GST), finalized after a national competitive bidding process that saw participation from four companies. This makes Kerala the first state to complete tender procedures among the 12 industrial corridor smart city projects sanctioned.
The EPC contract is scheduled to be completed within 42 months from signing.
Development phases
Land use
Frequently asked questions
Who is developing Palakkad Smart City?
The Palakkad Smart City project is being coordinated by Kerala Industrial Corridor Development Corporation Limited (KICDC), a special purpose vehicle jointly promoted by KINFRA (under the Government of Kerala) and the National Industrial Corridor Development and Implementation Trust (NICDIT) under the Government of India.
How much land is included in the first phase?
1,400 acres of already acquired land.
What is the estimated cost and timeline for Phase 1?
₹1,100 crore, targeted for completion within four years. As of September 2025, the contract was awarded at ₹1,316.13 crore (including GST) with a 42-month execution window.
What is the total project investment?
The Palakkad Smart City project, with a total estimated investment of around Rs 3,600 crore, marks a significant milestone in Kerala's industrial growth journey. Earlier, the state government had spent Rs 1,489 crore through the Kerala Infrastructure Investment Fund Board (KIIFB) for land acquisition, securing 1,450 acres for the project.
Is this part of a larger corridor project?
The Kochi–Bengaluru Industrial Corridor was conceived in August 2019 as an extension of the Chennai–Bengaluru Industrial Corridor. Kerala began implementing the project in September 2020 with equal partnership from the central and state governments.
What key infrastructure is planned?
Key infrastructure components include internal roads, drainage systems, bridges, water supply networks, fire-fighting systems, water reuse systems, sewer lines, power distribution systems, a sewage treatment plant, an industrial effluent collection system, and an effluent treatment plant.
Sources
- State govt invites tenders for infra development as part of Palakkad Smart City
- Kerala Launches ₹1,100 Crore Infrastructure Project for Palakkad Smart City
- Palakkad Smart City Kerala completes tender procedures
- Kerala Completes Tender Process for Core Infrastructure of Palakkad Smart City
- Kerala completes tender process for Palakkad Smart City infrastructure development
- Palakkad Industrial Area Kerala
- KICDC - Where Innovation Meets Infrastructure
- Industrial Area Palakkad, Kerala