No takers for IT parks outside Bangalore

Rent slashed from Rs 23 to Rs 5 per sqft to woo investors; proposal for parks in Mysore, M'lore pending

The State government’s efforts to spread information technology industries to tier II and III cities have not received good response.

In some IT parks in these cities, the occupancy level is dismal, while in some cities IT parks have remained just on paper.

Karnataka State Electronics Development Corporation Limited (Keonics), a State enterprise which is meant to give impetus to information and  communication technology products and services, chose Shimoga, Gulbarga, Mysore and Mangalore to set up IT parks in 2008.

While the parks have become a reality in Shimoga and Gulbarga, Keonics has not been able to take the proposal forward in Mysore and Mangalore, despite having land in prime localities.

For the Shimoga IT park, established on 70,000 sqft of land, the money spent by Keonics is Rs 14.2 crore. This multi-storey building’s occupancy is about 25 pc, with just 18,000 sqft being allotted to entrepreneurs. The only ray of hope for the IT park is Xchanging Solutions Limited, which is all set to open a business process outsourcing unit of 600 seats. There are totally six firms operating from here.

In case of the Rs 10 crore Gulbarga IT park, of the 53,000 sqft, 38,000 sqft has been allotted to eight companies. Though the park was inaugurated last year, it is yet to get power supply.

A HT line of 350 kV is drawn to the park which may commence supplying power after July 15.  The demand for space in Gulbarga is better than in Shimoga because it is closer to Maharashtra and Andhra Pradesh, officials said.

No plans to expand

At present, officials have no plans to take up the proposed expansion plans of these parks in two more phases. Keonics which had earlier fixed Rs 23 per sqft as rent, has reduced it to as low as Rs five sqft to woo investors to these IT parks. Absence of IT environment outside Bangalore, lack of skilled manpower and knowledge base are some of the key reasons for lukewarm response from business houses to move into smaller cities.

Keonics has adopted cautious approach towards establishing IT parks in Mysore and Mangalore. It has acquired five acres in Mysore and 3.5 acres in Mangalore. It wants these projects to be developed in public-private partnership. It called expression of interest first in 2009 and twice in 2010 but to no avail.

Sources said that as the government’s experience has not been encouraging in Shimoga and Gulbarga, no investor wants to lock his money in either the proposed Rs 50 crore project in Mysore or Rs 35 crore project in Mangalore. While investors are pushing  for build-operate-transfer (BOT) system, Keonics is not ready to part with its land on a permanent basis. However, Keonics managing director Ramachandra said the BOT or BOOT may become the option, finally.

Keonics plans to manufacture tablets

Sluggish growth in the IT sector is forcing Keonics to switch to manufacturing sector. A Delhi-based firm has been asked to prepare a detailed project report in this regard, according to Keonics managing director Ramachandra.

“We were manufacturing TV sets, wireless equipment and telefax machines among others. Later, we switched over to IT services and electronics. The IT sector has taken a beating now. We would like to get back to manufacturing field. We want to come out with tablets, smart phones, computers, LED lights etc. But, reorganisation can happen provided we get the government support. The DPR report will be ready in next two months,” Ramachandra said.

Keonics is a 30 year-old-organisation with 180 employees.