Bangalore bureaucracy drives IT companies to Bengal

Almost 10 years since Infosys sought land for a second campus in Bangalore way back in 2001 and more than four years since it got approval for acquiring land in 2006, the company may after all not build another campus in the state of Karnataka.

Plagued by bureaucracy, Infosys’ first modern campus in Bangalore may well be its last in the state, as plans for its second campus in its hometown - which was expected to come up on Sarjapur Road - may just be scrapped.

Government approvals for the land have been long-delayed and several representations to successive governments have only yielded assurances, which then seem to go nowhere. To add to that, the company has been asked to build its own support infrastructure for the project, which would drive costs up by 10 percent.

After waiting for years in the hope that the state will get its act together, the IT major says it is now almost giving up on its proposal to develop another campus at Sarjapur in Bangalore.

In an interview to CNBC-TV18, senior vice president and head of infrastructure at Infosys, Ramadas Kamath said, “There is a major problem which we are envisaging in terms of road connectivity, second is water, both are not there right now. The government has promised both, but there is absolutely no positive sign. We are waiting and watching.”

Infosys was looking to invest close to Rs 1,000 crore on 60 acres in phase 1 of its Sarjapur campus, but rather than waiting inordinately, they are looking at expanding other centres outside Karnataka.

Sources at Wipro - India’s other IT major - too told CNBC-TV18 that they are willing to invest close to Rs 500 crore on 34.43 acres (or 1.5 million sq ft) in phase 1, but they too have been awaiting government clearances.

This cog in the wheel attitude by the government has not helped and IT majors like Infosys and Wipro are looking to other states to expand their operations - West Bengal, which has lower prices and more availability of land as compared to Gujarat, being one of them.

Last month, the West Bengal government cleared Infosys’ plans for setting up its second campus in Rajarhat . Infosys is expected to take over 50 acres at the Rajahart area, on the outskirts of Kolkata, next month.

Wipro too is looking to expand its presence in West Bengal.

Wipro’s global head operations and the water business, Hariprasad Hegde told CNBC-TV18, “Rajahart is about 50 acres. We can triple our capacity in that campus.”

Both the companies are also looking at expanding in Tamil Nadu and Andhra Pradesh. And while the Karnataka government dilly dallies, it may be an opportune time for other states to grab the opportunity.

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