"All Indian cities, have infrastructure problems, Where do we move?"

IT industry protests Bangalore infrastructure
City grapples with problems of rapid urbanization driven by the offshoring boom

IDG Infoworld

Concerned about India's deteriorating infrastructure, key IT companies in the city have threatened to boycott Bangalore IT.in, an annual conference and exhibition to be hosted by the local state government in October.


Bangalore's potholed roads and electricity and water shortages have been a cause of concern for about five years, as the city grapples with rapid urbanization, primarily driven by the offshoring boom to the city by U.S. and European companies.

"The vast majority of the people who elect the state government are from the rural areas, so we in the city don't really have much of a voice when it comes to prioritization of development " said Bob Hoekstra, chief executive officer of Philips Innovation Campus, the software development operation in Bangalore of Royal Philips Electronics in the Netherlands.

Multinational companies including Intel (Profile, Products, Articles), Accenture, IBM (Profile, Products, Articles), and Texas Instruments (Profile, Products, Articles) have set up large facilities in the city. Infosys Technologies (Profile, Products, Articles), India's second largest outsourcer, and Wipro, the country's third largest outsourcer, also have their headquarters and large software development and services facilities in the city.

"The bad condition of the roads, traffic jams, and consequently the long commutes has led to a drop in productivity for IT companies," said Anant Koppar, president of the Bangalore Chamber of Industry and Commerce, the industry organization that has called for the boycott.

When customers from abroad visit the city, and see the traffic jams, and potholes in the roads, they often wonder whether the city can cope with its growth, said Koppar, who is also the president of the technologies division of MphasiS BFL Group, an outsourcing company in Bangalore. These customer perceptions may influence long-term decisions to outsource in Bangalore, he added.

The state government's response to the protest has disappointed the IT industry. "We are doing our best," N. Dharam Singh, the state's chief minister was quoted as saying last week in The Times of India in Bangalore.

IT companies in Bangalore do not, however, have plans to pull out of the city. "We will not move, but we will stay and fight," Hoekstra said. After building key competencies at the center over 10 years, it is very difficult for Phillips to move its software center and start from scratch at another location, Hoekstra added.

The IT industry is hoping for a revival of a partnership between the government and industry that existed when Singh's predecessor, S.M. Krishna, was the chief minister of the state.

In its bid to improve the city's infrastructure, the IT industry will also have to keep in check some of its own errant members, according to analysts. Recently, residents of Koramangala, an upmarket sector of Bangalore, approached the High Court of Karnataka to complain that a number of buildings that house software companies were in violation of land-use regulations prohibiting commercial offices in residential areas. Most of these buildings do not have private parking lots, and vehicles of employees are parked on the roads, disrupting traffic in the residential areas, according to the residents. The High Court has directed local authorities to remedy the problem by November.

"We do not approve of what some of the builders and IT companies are doing, but as an industry chamber it is not within our charter to enforce the law," Koppar said. The city's residents will have to be a little more flexible about having software companies in residential areas, according to Hoekstra. "Software startups have usually started up from residences, and we can't kill this aspect of the city that has contributed to its entrepreneurship and growth," he said.

Though Bangalore's poor infrastructure is a cause for concern, some analysts do no think it will have a significant impact on the industry. The infrastructure problems in the city have not led to a loss of productivity, because the number of working hours for employees has stayed the same, according to Siddharth Pai, a partner at sourcing consultancy firm, Technology Partners International Inc. (TPI) in Houston.

"It is just that employees have to leave earlier to get to work," said Pai, who cautioned that TPI has not done any specific research on the impact of Bangalore's infrastructure on the city's outsourcing industry.

Although foreign customers are taken aback by Bangalore's poor infrastructure, they are as taken aback by the poor infrastructure in other Indian cities, Pai added.

"With very minor differences, all Indian cities, except perhaps the capital Delhi, have infrastructure problems," Hoekstra said.