Vizag IT facilities fail to attract entrepreneurs

By SNV Sudhir

Visakhapatnam, Dec 11, 2013: Contrary to the demand from IT companies to set up operations in Vijayawada and Guntur considering them low cost destinations, there is no demand from IT entrepreneurs to start their units in Vizag, which is considered as next IT destination in Andhra Pradesh after, Hyderabad.

Blame it on state government policy, there are no takers for the plots at the IT/ITES SEZ in Gambheeram, which was notified by the union ministry of commerce, way back in April 2009.

No IT entrepreneur has come forward to take these plots at IT SEZ in Ganbheeram which was developed by the APIIC, in an extent of 51.28 acres around 20kms away from the city. All the 28 plots are still vacant since 5 years.

Interestingly the Gambheeram IT Park proposal has created real estate boom in the surroundings. Realtors use “near Gambheeram IT Park’ in their brochures to attract people to buy plots in the layouts developed by them in the area.

The APIIC also fixed an upset price of Rs 3,140 per square meter that has to be deposited to get the lease at Gambheeram IT Park.

“The SEZ policy for IT parks should be blamed for this situation. This is pathetic that even after 5 years not even a single company has come forward to begin the operations. Even after paying so much money as deposit it is conditional lease and there is no land ownership. The lease holder can’t sub lease it. Most of the IT companies that are actually looking at Vizag are domestic and midsized.  These factors are discouraging them. There is also no social infrastructure around. Upon that the land upset price at Gambheeram is also too high,” said Rushikonda IT Park Association (RITPA), vice president, O Naresh Kumar.

At present there are two IT parks in Madhurawada and one in Duvvada SEZ. The IT entrepreneurs are asking the authorities to de notify these IT Parks from being SEZ to encourage new investments.

There are around 100 medium, small and big IT and ITES firms operating in Vizag employing around 10,000.  Most of the units functioning in Vizag, deal in end-to-end business integration, medical billing, financial information processing, ERP product, content management, networking, business, recruitment process outsourcing, and medical transcription.

“There were only a couple of applications for the plots at Gambheeram IT SEZ and they couldn’t be processed due to various reasons including lack of interest too from the applicants. After seeing the abysmal response we wrote to our higher authorities seeking to de notify Gambheeram IT SEZ and also Rushikonda IT SEZ to encourage IT entrepreneurs and we are waiting for further orders,” said APIIC Zonal Manager, V Nagabhushan Reddy told this correspondent.