Real estate developers review IT SEZ projects

With slowing exports, real estate developers are putting IT special economic zones (SEZs) plans on the back-burner.

Already real estate major DLF has sought de-notification of four SEZs across the country, including one in Kolkata, citing reasons of slowdown in the IT sector. According to industry observers, many local real estate developers were likely to follow suit. Kolkata-based PS Group, which planned to develop a 25-acre SEZ at Rajarhat, is no longer going ahead with the project, said Pradeep Chopra of PS Group. The Kolkata-based developer had projected an investment of Rs 200 crore in the SEZ. The company has so far been able to acquire only four acres for the project.

"We have now decided to convert the entire project into a residential one, due to the economic slowdown and land acquisition problems," said Pradeep Chopra. Abhijeet Das, joint managing director, Lemongrass Advisors, said, "The whole idea behind the de-notification of DLF SEZ was to widen the scope for inviting more companies to set up offices in the space." State IT minister Debesh Das admitted that IT exports from West Bengal were indeed downand that de-notification of IT SEZs was on the rise. "Realty is slowly picking up and many developers are now pitching for residential and commercial complexes", Das said.

From TCS, Wipro, Infosys to HCL, Patni and Cognizant, companies are now scrambling to raise their share in the domestic software and IT services pie, valued at Rs 58,000 crore. According to industry insiders their earnings from the domestic market have been less than 10 per cent. "The meltdown has forced many US, European and Japanese giants to pare their IT budgets that is hitting the Indian firms hard.

These IT companies have never really focussed on marketing their products and services in the domestic market", Das said who felt that there was a lot of scope in mobile phone software development together with software and technical support for domestic telecom and banking call centers. However, developers whose SEZ projects are not due for completion in the near future, are still bullish on their projects.

For example,Riverside Developers Pvt Ltd, which is planning a SEZ project at its proposed township at Batanagar, is going ahead with the IT SEZ in it, as it is due for completion only in the first quartr of 2011. "We do not see any need for de-notification of our SEZ, as it is due for completion only in 2011," said, Sumit Dabriwal, managing director of Riverside Developers Pvt Ltd. As is Infinity Infotech Parks Limited that is developing the 122 acre ‘Kolkata IT SEZ’ at Bantala .

An official of the company said, "It is a good time to construct as by the time we are ready, the meltdown impact should be gone." Infinity is building a 2.2 million square feet IT SEZ and the project is currently in the design and development stage.

“We expect to finish work on the first phase in two and a half years from now," he added. Unitech, which has an IT SEZ at Rajarhat, is also going ahead with the work on the second phase of the project, said sources.