Chennai: This is actually the research lab. But we have such a load of administrative work to do that we can’t conduct any experiments!”—reads the caption in an R.K. Laxman cartoon framed and hung on the wall of Indian Institute of Technology-Madras (IIT-M) director M.S. Ananth’s office.
Even six months ago, Chennai-based Invention Labs Engineering Products Pvt. Ltd was operating out of the ultimate status symbol for any start-up—a garage in the house of one of its founders.
But as its business of designing devices such as vending machines grew this year and the prospect of a move to the still incomplete IIT-M Research Park (IITMRP) remained dim, the company shifted from the garage to a temporary office in an industrial zone three months ago.
“We were expanding and so were keen on joining the research park,” says Aswin Chandrasekaran, a 27-year-old IIT-M alumnus and one of the founders of Invention Labs, incubated by his alma mater. “The research park should be opening some time soon, but I am not sure when. Meanwhile, our existing space was a bit crammed and so we moved.”
IITMRP, an independent company run by IIT-M and its alumni, was envisioned in 1999 modelled on university and corporate ecosystems such as the ones in California-based Stanford University—the birthplace of Internet search firm Google Inc. and rival Yahoo Inc.
With three 12-storey towers over 11.4 acres, for a total of 1.6 million sq. ft of office space, it is expected to be the first of its kind in terms of scale in India. But a decade after it was conceived, the gates haven’t opened amid delays in securing government land and loans, a decline in the line-up of prospective rental clients due to the economic downturn, and more recently a roadblock following an unforeseen demand for a defence clearance.
“There have been lots of complaints and they (prospective tenants) have been very patient, but all I can say is that we cannot be faulted for not trying,” says Ananth.
During the course of waiting, the Rs230 crore project’s costs have risen to Rs300 crore.
About Rs100 crore is expected to come from the ministry of human resource development in December, four years after it was offered. The balance amount is being funded through a Rs75 crore Canara Bank loan and likely rents from the 100 firms, which are expected to occupy the towers.
Initially planned for completion next year, the campus, within walking distance of IIT-M, is likely to be ready only by mid-2011, said the 63-year-old Ananth, who plans to retire next November.
While IITMRP was formed in 2005, documents for the land on a prime spot about 1km sideways of the Old Mahabalipuram Road in south Chennai came only last year after which the bank loan was cleared.
The timing to proceed with construction couldn’t have been worse as the economic downturn extinguished the enthusiasm of prospective tenants, further hurting funding plans for the project.
“Everybody is being cautious about new investments,” says Sandhya Shekar, chief executive of IITMRP and a former director for tech consultancy Gartner Inc. “But people are also increasingly feeling the need of research and development, and innovation for survival.”
The first tower was planned to be inaugurated between January and March. That date was pushed to June, then October, and now to January. The reason for the most recent delay: the demand two months ago for a mandatory clearance from the defence department overlooked by some government authorities processing the IITMRP papers.
Unless all the government clearances come through, the lights will literally not go on. Water and power supply in the building will come through only after the defence clearance paves way for other paperwork.
At the IITMRP site, accessed via a kilometre-long dirt road, the interiors of the lone building are dark and there’s still debris to be cleared. Some walls have already required repainting.
“In the current environment, most builders are on the fast track to finish their projects as there is abundant labour available and even construction equipment is available at a lower price than before,” says C. Velan, CEO of Tata Realty and Infrastructure Ltd’s Infopark, a technology-focused special economic zone neighbouring IITMRP. “There’s an average annual 3-4% jump attached to any construction delay due to likely wage and raw material cost escalation.”
Shekhar and Ananth are optimistic about breaking even in 10 years as planned. Still, there’s no denying that valuable time and money is being lost as the construction and occupancy times get stretched.
“If the research park happened six years earlier, we would have been in the times of an economic boom and the whole thing could have taken off much sooner,” Ananth says. “But there’s always a time when things work out and I think the time has finally come for this research park.”