Calcutta, Nov. 23: A proposed information technology logistics hub in Salt Lake’s Sector V has been scrapped because of “viability” concerns.
The decision brings to the fore the extent of unused built-up space in Bengal’s tech town — a telling statement at a time the new government is struggling to attract fresh investments.
The joint venture project between South City Projects, the developers of South City Mall, and the Calcutta Metropolitan Development Authority (CMDA), firmed up when the Left was in power, would have come up on 4.5 acres near the Technopolis building in Sector V.
“The project was scrapped about two months back as the private partners thought it was not commercially viable for them,” said Vivek Bharadwaj, the CMDA chief executive officer.
Atanu Mitra, head (legal), South City Projects, confirmed: “We can only say that the project was not commercially viable for us.”
The IT logistics project envisaged convention halls, hostel facilities for women who could stay back overnight and 24x7 plug-and-play centres.
The project would also have provided parking space for many cars. Around 5,000 cars are parked on the streets of Sector V in the absence of proper facilities.
“It was envisaged to provide support to the IT and ITes industries in Sector V. A women’s hostel is of utmost importance since the IT sector has a large number of women in its workforce. Many of them come from faraway places,” said the managing director of a company in Sector V.
The plug-and-play centres were supposed to provide readymade space to small and medium companies. Such companies usually take the centres on rent for a few months to gauge the business opportunities before committing to buy space. “It is not uncommon for large companies, either, to test the waters before investing large sums. These centres were an excellent idea,” said an official from a company.
The memorandum of understanding for the hub was signed in 2008 and a joint venture company named Calcutta Metropolitan South City Logistics Ltd was floated.
But the project never took off because of several hitches, starting with encroachment on the land that took about a year to be cleared. After that, the downturn delayed construction.
A few months ago, South City requested the CMDA to incorporate some changes in the original plan to make the project viable but the authority declined to do so, sources said. “It was not possible to change the initial plan,” Bharadwaj said.
CMDA sources claimed South City was not keen on building too many convention centres. “Three convention centres were supposed to come up. When they came to us earlier this year, they did not want to build so many convention halls. They wanted to add more commercial space,” he said.
The CMDA spoke to the state urban development ministry, which owns the land. The ministry told South City that it could exit if the terms were not suitable, the CMDA sources said.
South City had paid the CMDA Rs 14 crore for signing the deal — 10 per cent of the total Rs 140 crore it was supposed to pay. “We will return them the money,” said a CMDA official.
Builders said whatever the reason for shelving the particular project, the decision had shed light on the larger reality of vast built-up space lying empty in Sector V.
“About 2 million square feet of built-up space, out of a total 5 million square feet, is still lying vacant in Sector V. If you add Rajarhat, the volume is much more. The fact is, there is no demand for IT space,” said the chairman of a construction company that built one of Sector V’s landmark buildings.
The vacant space is an indication that the calculations of an investor boom after the Buddhadeb Bhattacharjee government accorded top priority to IT, on the basis of which office space was built, have gone awry.
“The scrapped hub would have added to the list of vacant built-up space as no new companies are coming to Bengal because of the government’s hands-off land policy and its decision not to accord SEZ status to companies,” said an official.
Even Infosys’s plan is hanging fire after the government refused to give its Rajarhat project SEZ status.