Calcutta, Sept. 2: Bickering ministers in the Bengal government have started writing the epitaph of the IT township project made infamous by the Vedic Village flare-up but the death knell was sounded the very day the venture was born.

In a desperate attempt to create a land bank for potential IT investors, the state government, through its nodal IT agency Webel, entered into an agreement with Vedic Realty and Diamond Group for the 1,200-acre IT township, 600 acres of which were earmarked for IT companies.

As part of the agreement on August 25, 2008, Webel would have got the 600 acres free and, in exchange, it was to develop infrastructure for the entire 1,200-acre project.

“But the agreement was vague…. It did not peg any project cost or set any deadline on completion. The agreement was even silent on the amount of money to be spent on developing infrastructure,” said a senior government official.

No planning was done on how a company like Webel, which barely breaks even with annual earnings of around Rs 110 crore, could fund the infrastructure development in a 1,200-acre project.

According to estimates, Webel would have had to spend in excess of Rs 500 crore for roads, arteries, sewage lines and facilities for water and power.

Special budgetary provisions had to be made for the IT department to fund Webel.

Although the contours of the project, christened Kolkata Links, remained blurred, the state government started selling it as a possible destination to potential investors. The state IT department signed memoranda of understanding with Infosys and Wipro and promised to deliver 90 acres each to the IT giants.

Last month, IT minister Debesh Das promised at a CII meeting that Infosys and Wipro would be handed over the land by December, though the two companies were not in a hurry to set up campuses in the proposed IT township.

“I don’t know how the minister could make an announcement like that even before getting the land in the government’s possession from the private players,” wondered an official in the IT department.

According to sources, the private promoters had given a list of their land purchases, totalling 180 acres, to the IT department sometime in May, even though they claimed that they had purchased over 500 acres from farmers in Rajarhat and Bhangar.

“Webel was supposed to check the registration, mutation, size and the contiguous nature of the plots mentioned in the list. But even before carrying out the necessary scrutiny, the state government announced that it was ready for the handover,” a source said.

With the project now getting mired in a political controversy and the main promoter, Raj Modi of Vedic Realty, behind bars, the state IT department is at a loss.

“I can only say that we will not be involved in anything that is illegal,” said Das, distancing himself from the controversy. He probably meant that the government was in no position to hand over the land to Infosys and Wipro.

IT minister Debesh Das

This is not the first failure of the government. In 2004, Hidco, an agency under housing minister Gautam Deb’s chairmanship, had asked Wipro and Infosys to shell out Rs 2.16 crore an acre, which forced the companies to scout for land elsewhere.

The West Bengal Industrial Development Corporation also failed to arrange for land for Infosys in 2006 after the chief minister had asked the industries department to do so.

The IT department’s next attempt at developing a 350-acre township in Jagadishpur, 3km from Rajarhat, had to be aborted in May 2009 as farmers refused to sell land to the government.

Das did not have an answer to questions on what would happen to the commitments the state government had made to Wipro and Infosys. The first-time minister was also silent on what alternative plans the government was drawing up to arrange for land for IT companies.

“This particular form of public-private partnership model was ill-conceived and the government unnecessarily spent more than a year banking on it. Now they are stuck as they don’t have a Plan B,” an official said.

The impact of the controversy will affect other industries as the South 24-Parganas district administration has suspended mutation of land. In adjoining North 24-Parganas, mutation has been stalled for the past three months because land-related data are being computerised.