Orissa IT scare for Bengal - Firms make headway in neighbouring state

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By SOHINI MOOKHERJEA in Calcutta
  • Published 16.04.08
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Calcutta, April 16: Orissa has beaten Bengal to the draw in getting information technology investments up and running.

Infosys, Wipro and Satyam — three companies whose proposals are pending with the Bengal government at different stages for two years — have found land in neighbouring Orissa for their projects.

Infosys has taken possession of 100 acres in Bhubaneswar while Wipro has started constructing a 25-acre campus in Orissa. Satyam has applied for additional land to step up its operations in Bhubaneswar, in contrast with the Bengal project that has been hit by procedural delays after the foundation was laid in 2006.

“Infosys, which is currently operating on a 50-acre campus with 2,000 people, had asked for and was given an additional 100 acres,” Surjya Narayana Patro, Orissa’s minister for IT, energy and culture, told The Telegraph. Infosys had earlier said it wanted to take the headcount in Bhubaneswar to 4,500.

However, the Infosys project in Bengal has been mired in differences with the government over location and price. Red tape has added to the delay.

Infosys wanted land in Bengal for Rs 20-50 lakh an acre but the government set a price of Rs 2.16 crore which was eventually brought down to Rs 1.6 crore. The price could be lowered further as the government has found cheaper land at Vedic Village on the fringes of Rajarhat.

Infosys officials had made two to three visits to Calcutta to discuss and see the alternative site at Vedic Village but the deal is yet to be sealed.

The Orissa minister declined to disclose the price at which Infosys was given the additional 100 acres, raising the possibility of discounted rates.

A price discount on something as sensitive and scarce as land is not a bright idea but states are now engaging in such cut-throat methods to lure investments.

Orissa is fast catching up with Bengal in jobs in information technology. Orissa has 32,000 people in IT as against Bengal’s 40,000-45,000. Patro said Genpact, a BPO, has plans to recruit 5,000 people in Orissa.

Wipro had asked for 25 to 40 acres for an expansion project in Calcutta in 2006. Had the land been allocated, the company would have stepped up the number of employees in Calcutta from 4,000 to 7,000 next year.

“We have not been shown any alternative Vedic Village sites of late,” said Sudip Banerjee, president, enterprise solutions and chief strategist, Wipro Technologies.

Satyam had laid the foundation stone for a 2.77-acre campus in Sector V in Salt Lake in February 2006. The campus was supposed to employ 2,000 people by the end of this year.

The entire blame for the delay cannot be pinned on the state government, though. If environmental clearances took time initially, the company decided to change building plans later.

The upshot has been that Satyam has a 300-employee centre running in Bhubaneswar and has applied for more land.

But in Bengal, the company is yet to get off the ground. It is now looking for lease space in the state to make up for the delay.