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Partha Infy bound on lease mission

Calcutta, Sept. 5: Industries minister Partha Chatterjee, who leaves for Bangalore tomorrow to speak to the management of Infosys, said the news that the IT major wanted to sign the land lease deed was “positive” but he wanted “to know what they want to do with the land”.

Chatterjee said this evening: “It is 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.”

Infosys had written to the state 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 (WBHIDCO) 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 the IT major by the Buddhadeb Bhattacharjee government in November 2010 at a subsidised rate of Rs 1.5 crore an acre, compared to the then market rate of nearly Rs 8-10 crore an acre, to develop an IT SEZ that would employ 5,000 people.

Infosys paid Rs 75 crore for the plot when the market price was nearly Rs 600-750 crore then. Today, the plot could be worth over Rs 1,000 crore.

The IT 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 absence of a lease deed.

Government officials said Infosys did not mention in the letter when it wants 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 endorse the project as an SEZ that would have allowed it a tax bonanza.

Chatterjee said there has been no change in government policy over the SEZ status.

The state’s plea to extend the Software Technology Park of India (STPI) scheme, which also comes with some sops but less than those for SEZs, also did not cut ice with the Centre.

Given that Infosys is struggling to meet the growth expectation 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 up 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 state government has been meticulously pursuing investors seeking to take land on lease after it put down a strict timeline and default clause in the lease deeds to punish companies in case of violation.

Companies like Jindal’s JSW, Jai Balaji, Adhunik are still sparring on many of the clauses of lease deed, including the timeline.

The Infosys letter has put the Mamata Banerjee government in a dilemma.

It is not in a position to drive a hard bargain on the timeline with Infosys in absence of any big project in their one-and-half year term. But it cannot potentially sign the lease without a commitment from Infosys on when it would start the project.

Minister Chatterjee said the state has no issues if Infosys wanted to come as a co-developer in a plot leased to Shapoorji Pallonji. “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.