Kolkata: A unique deal the West Bengal government struck with a real estate developer earlier this year, where the latter would acquire land at a price and transfer it free to the former, has helped the state convince Infosys Technologies Ltd to set up a development centre here, and Wipro Ltd agree to expand its presence in the city further.
The government had started going slow on land acquisition after violent protests by farmers whose land had been acquired by the government at Nandigram and Singur. In deference to these protests, the government relocated a special economic zone (SEZ) planned at Nandigram and decided to avoid acquiring land for industrial projects.
That contributed to a further delay in West Bengal’s at least two-year-old negotiations with Infosys. A deal with a company called Vedic Realty Ltd, first reported in Mint on 15 March, and which effectively involves the government outsourcing its land acquisition function at no cost, seems to have turned things around in the state’s favour.
Infosys announced on Thursday that it would build its 11th development centre in the country on a 90-acre plot in Rajarhat near Kolkata, which would be leased out to it in “a couple of months”.
A few hours later, the company’s rival Wipro said it too would lease a 90 acre plot in the same area as Infosys.
Infosys’ proposed development centre in Rajarhat will be an SEZ. The company will be initially spending up to Rs500 crore on building it, according to Infosys’ chief executive and managing director S. Gopalakrishnan.
“This would be one of our largest centres,” Gopala-krishnan said after he and his colleague T.V. Mohandas Pai, director, Infosys, met West Bengal’s chief minister Buddhadeb Bhattacharjee.
Initially, Infosys will recruit 5,000 people in Rajarhat. The company is looking to recruit up to 25,000 people till March next year, but it is unlikely that its development centre will be ready by March 2009. The company typically takes about a year to build a development centre from the time it gets possession of land and necessary approvals.
Wipro, which currently employs 4,500 people in Kolkata in a 19-acre SEZ, had earlier asked the government for a 52-acre plot for expansion. It scooped up 90 acres instead. Wipro, too, will build an SEZ in Rajarhat at an investment of Rs500 crore and employ up to 10,000 people, according to West Bengal’s IT secretary Siddharth. “Instead of going to the government every three-four years, we decided to take a large block in one go,” said Wipro’s vice-president and location head (Kolkata) Tamal Dasgupta.
Both Infosys and Wipro had refrained from doing this earlier, citing high land prices of at least Rs2 crore an acre.
The price that Infosys and Wipro have agreed to pay the government for the land is being kept under wraps—neither the government nor the companies would disclose it—but an IT department official said on condition of anonymity that the companies would be shelling out less than Rs1 crore an acre. That’s competitive considering the fact that the Kolkata Municipal Corporation auctioned a 3.35 acre plot nearby, albeit for a different use, for Rs135 crore, or Rs40.3 crore an acre, earlier this week.
Vedic Realty will acquire 600 acres at Rajarhat at market prices and transfer it free to the government. The government, in turn, will provide infrastructure support for the developers of the 600-acre township in the same area. Apart from infrastructure, Vedic Realty also stands to benefit from appreciation in the value of its land because of the development of the SEZs of companies such as Wipro and Infosys.