Global slump spoils Vizag’s IT dreams

By SNV Sudhir

Visakhapatnam, March 30, 2012: The state government’s plans to develop Vizag as the state’s second IT hub is unlikely to become a reality anytime soon thanks to global slowdown and lack of qualified manpower.

The Andhra Pradesh Ind-ustrial Infrastructure Corporation, which had allotted land to many firms for setting up facilities before 2008, has started issuing no-tices to recall land allotme-nts from firms that have fa-iled to keep their promises.

“Around 23 companies ha-ve been served notices for failing to start construction or for not starting operations,” APIIC zonal manager Mr Durga Prasad said.

APIIC has already cance-lled land allotments made to seven companies including Wipro Technologies. “We will cancel some more allotments after seeing the response to our notices,” he said.

Land was allotted at three IT parks at Madhurawada and Resapuvanipalem in the city between 2005 and 2008 and everything seemed fine as the companies were bullish on expanding to tier 2 and tier 3 cities to save on high real estate costs in prime IT cities. However, the 2008 global recession changed everything.

More than 70 per cent of the IT companies that were allotted plots in the three IT SEZs have not started work. Of 46 companies who were allotted 91 acres in the Madhurawada IT SEZ, only nine have set up shop.

Mr Peter K. Scheenber-ger, president of Vizag Info-rmation Technology Assoc-iation said, “The city has a conducive atmosphere but global factors such as the 2008 recession might have had an impact on the firms that were allotted plots.”

Though IT and ITeS business in Vizag is growing at a faster rate than conventional IT hubs, the city seems to be lacking in qualified manpower.

“It is difficult to get qualified manpower in Vizag. While it is ideal for setting up a BPO facility, it is difficult to set up a full-fledged IT development facility as even people in the catchment areas of the city prefer to work in Hyderabad, Bengaluru or Chennai, instead of staying in Vizag,” said a senior executive of an IT major.