Bangalore’s loss is Chennai’s gain

Bangalore’s loss is Chennai’s gain
New Indian Express

BANGALORE/CHENNAI: Coming under the scanner for its crumbling infrastructure, India's Silicon Valley faces the risk of losing out to formidable rival cities like Chennai in attracting big ticket investments not just in information technology but in other sectors as well.

Bad infrastructure, exposed further by the record rains last month, poses a threat to Bangalore's brand name as a preferred investment destination, which has taken a severe beating.

Not to speak of another neighbour Hyderabad and far-away Delhi that are readying themselves for a share in the pie.

Heavy rains - a record for over a century - flooded a number of IT firms, including Wipro, in the suburbs of Bangalore.

“The recent rains have proved that there has been no improvement in the infrastructure, which have been affecting the brand name of the city in the recent past. One must admit that brand name is decisive. It determines the quantum of investment. IT companies, whose first preference was always Bangalore, would now seriously look to other cities like Chennai and Bangalore,'' said Ananth R Koppar, president of Bangalore Chamber of Industry and Commerce.

However, infrastructure woes in Bangalore have proved to be a blessing in disguise for Chennai, which is now emerging as the next preferred destination for a number of manufacturing companies as well as IT firms.

German carmaker BMW has already announced setting up of Rs 110-million manufacturing plant at Maraimalai Nagar while a host of other corporates, including Finnish telecom major Nokia, Flextronics, have also announced mega investments at Sriperumbudur.

In addition, Korean auto major Hyundai and American giant Ford, which have their India plants near Chennai (Irrungattukottai and Maraimalai Nagar respectively), have also started expanding their facilities in a big way. Ford is infusing $ 75 million to its Chennai facility for expansion. Significantly, IT majors like Infosys, Wipro, TCS, have also began to shift their focus towards Chennai.

“With so much of negative publicity to Bangalore, why would anyone want to go to Bangalore,'' said Keshav R Murugesh, chief operating officer of Nasdaq-listed Syntel Inc., which is making Chennai its biggest global centre.

In a bid to accommodate more and more industries, the State Government has also initiated steps to improve the existing infrastructural facilities. It has allocated Rs 525.05 crore for the construction of four river bridges, six flyovers and widening of several roads in the city.

In Hyderabad, there is mixed response on the collapse of infrastructure in Bangalore and its fallout in Andhra Pradesh.

M Hemalatha, Federation of Andhra Pradesh Chambers of Commerce and Industry said, the infrastructure problems and political instability in the state helps Andhra Pradesh indirectly to attract the industry. “There has not been a single negative report about the poor quality of infrastructure in the state. The State Government is also industry-friendly. All these factors would naturally count'', she adds.

The Delhi Government, which has not formulated any special policy for IT investment, has, however, set up a 40,000-sq-ft IT park for software companies to set up shop in the capital.

Chief secretary S Raghunathan says, the aim is to see Delhi develop as an IT hub, together with Noida and Gurgaon.

“We are not offering any special concessions to IT companies, but Delhi offers to these companies the best infrastructure, such as roads and uninterrupted power supply.''

However, the deterrence for companies to come to Delhi is the cost of land, which is one of the highest in the country.

In Kolkata, G D Gautama, principal secretary of the Information Technology Department in the West Bengal Government, says a positive attitude has helped the state in logging in 70 percent growth against 35 percent, nationally.

Kolkata, at present, has 235 IT and ITES companies employing 33,000 people. Gautama said that a number of companies were setting up shop at the moment, including Mahindra BT, ICICI One Source, ITC Infotech, Satyam, HSBC, and IXIA, while the existing ones were expanding.