Posco ICT pulls out of Orissa

Posco ICT Company Ltd, an IT firm which was registered with the Software Technology Parks of India (STPI)-Bhubaneswar, has decided to wind up its operations in the city and relocate to the Delhi-NCR region.

"Posco ICT Company Ltd has applied for winding up of their operations in Bhubaneswar in January 2011. The board of directors of the company based out of Korea has taken a decision to close the Bhubaneswar office and relocate the team and operations to Delhi-NCR region", the state IT minister Ramesh Majhi said in the state assembly.

It may be noted that Posco ICT is the IT arm of South Korean steel giant Posco, which proposed to set up a 12 million tonne steel plant near Paradip in Orissa. However, the company is unable to make any progress on its steel project even after six years of signing of MoU due to stiff resistance of the locals.

Apart from the shadow of gloomy prospects for its parent company, the exit of Posco ICT also highlights the fading interest of IT firms in Bhubaneswar as an investment destination.

On the face of it, the city was poised to drive the next phase of IT growth in the country with the presence of the four IT bigwigs- Tata Consultancy Services (TCS), Infosys, Wipro and Mahindra Satyam (formerly Satyam Computers) which had also announced plans to expand their operations further.

Add to this, 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, the lack of resolve by the developers as well as the state IT department in expediting these projects seems to have pushed them into the back burner. 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 1000 crore which it had committed for setting up the DLF Infopark project in the city.