MindTree scraps its Bhubaneswar project

MindTree Consulting Ltd, one of India's leading mid-tier IT firms, has decided not to go ahead with its plan to set up a software development centre in the city.

The IT firm's project in the city was bogged by inordinate delay and finally the company has communicated to the state IT department on its inability to pursue the project. The company has even sought refund of the cost which it had deposited for land allotment for the project.

"The state IT department and MindTree Consulting had inked an MoU (Memorandum of Understanding) for setting up a software development centre and accordingly, 20 acres of land was allotted to the company at the Chandaka Industrial Estate on 29 August, 2006. As the company was unable to set up the project in the stipulate time period, the land leased to the company was cancelled on 22 May, 2010. The company has now expressed its inability to go ahead with the project and has sought refund of the amount it had deposited for land. The company's proposal is under consideration of the department," said state IT minister, Ramesh Chandra Majhi.

MindTree, co-headquartered in Bangalore and Somerset in New Jersey (US), had announced an investment of around Rs 200 crore for the development centre in Bhubaneswar. The company was to initially recruit about 1,000 software professionals and eventually ramp up its headcount to 5,000.

It may be noted, a few days back Posco ICT Company Ltd, the IT arm of South Korean steel major Posco, which was registered with the Software Technology Parks of India (STPI)-Bhubaneswar, had announced its decision to wind up its operations in the city and relocate to the Delhi-NCR region.

The gradual exit of IT firms from Bhubaneswar is a pointer to the fact that the city is losing its sheen as a favourable IT destination.

The city was poised to drive the next phase of IT growth with the presence of the four IT bigwigs — Tata Consultancy Services (TCS), Infosys, Wipro and Mahindra Satyam, which had also announced plans to expand their operations further.

There were a rush of investment proposals from the other prominent IT investors including MindTree Consulting, Genpact, DLF, Raheja Corporation, Zensar Technologies, ICICI Bank and the Kolkata-based Apeejay Surrendra Group.

However, lack of resolve by developers as well as the state IT department in expediting these projects seems to have put those on the backburner.

While most of the IT investors are noncommittal on commencement of construction work for their projects, a few players have passed the buck on the state government for its lukewarm approach in developing the infrastructure needed for the projects.

Going by the scale of IT investments in the city, DLF leads the pack with Rs 1,000 crore which it had committed for setting up the DLF Infopark project in the city.

DLF which had announced to develop the project under the STPI scheme had sought the state government's approval to earmark a greater area for commercial development. However, the state government is yet to take a decision on the matter.

IT companies have generated over 25,000 jobs in the state in the past five years.