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Govt hopeful but cautious on Infy land wish

Calcutta, Sept. 5: The state government is “cautiously optimistic” about Infosys’s proposal to sign the lease deed for a 50-acre plot in Rajarhat.

Industries minister Partha Chatterjee, who leaves for Bangalore tomorrow to speak to the Infosys management, said: “It is a positive news that they are seeking to sign the lease. This means Infosys is not leaving the state. But I would also like to know what they want to do with the land.”

The IT major had written to the government on August 29 seeking the execution of the lease deed.

It was granted permissive possession of the land in November 2011, when the West Bengal Housing Infrastructure Development Corporation (HIDCO) handed over the land map of the 50-acre plot in Rajarhat’s Action Area III to officials of the company.

The land was originally allotted to Infosys by the Buddhadeb Bhattacharjee government in November 2010 at a subsidised rate of Rs 1.5 crore an acre. The then market price was nearly Rs 8-10 crore an acre. The land was given to develop an IT special economic zone (SEZ) employing 5,000 people.

Infosys had paid Rs 75 crore for the plot at a time the market price was nearly Rs 500 crore. Today, the plot could be worth over Rs 1,000 crore.

The company has the right to build an IT campus here on the basis of permissive possession but it does not have the title of the plot in the absence of a lease deed.

Government officials said the Infosys letter did not mention when it wanted to start the project.

The company, which recently lost its place as the Indian IT bellwether to TCS, had put the Bengal project on hold after the Mamata Banerjee government refused to grant SEZ status to the project, which would have made it eligible for tax concessions.

Chatterjee today said the government’s policy on SEZ status was still the same.

The state had planned to offer the Software Technology Park of India (STPI) scheme, which also comes with some sops but less than those for SEZs, to the Infosys project but that did not find favour with the Centre.

Given that Infosys is struggling to meet growth expectations of the investor community because of adverse macro-economic circumstances, the letter from the IT company seeking to sign the lease has raised eyebrows. Infosys declined comment today.

“Infosys could be trying to secure the title of the land by signing the 99-year lease, which is generally taken to be perpetual in nature, given that it has got a Rs 1,000-crore plot for only Rs 75 crore,” an industry observer said.

The letter has come at a time the state government has been trying to include strict timeline and default clauses in lease deeds of other investors with the objective of holding violators to account. Companies like Jindal’s JSW, Jai Balaji and Adhunik are still sparring with the government over some lease deed clauses, including the timeline.

The Infosys letter has put the government in a dilemma. It is not in a position to drive a hard bargain with Infosys on the timeline in the absence of any big project coming to Bengal during its term so far. But it cannot potentially sign the lease without a commitment from Infosys on when it would start the project.

Minister Chatterjee said the state had no issues if Infosys wanted to become a co-developer for a plot leased to the Shapoorji Pallonji Group. “It is between them. I have no problem,” he said.

Shapoorji Pallonji had around 48 acres of land in Rajarhat notified as an IT SEZ.

However, the company did not proceed with the project and applied for de-notification. The SEZ commissioner has forwarded its application to the Centre.