Absence of govt halts iGATE's expansion

The absence of an elected and full-fledged government in Karnataka has halted the expansion plans of IT & BPO services provider iGATE Global Solutions.

For the last four months, the company is awaiting environmental clearance from the state government to commence work on a 350,000 square feet building in a vacant land in the existing campus in Whitefield.

The company intends to develop the new centre in two phases with a total investment of Rs 110 crore to accommodate 3,500 personnel.

"The first phase (150,000 square feet) was supposed to take off in September last year. The building had to be ready by November this year. Unfortunately, the environmental clearance is pending for the last four months. We are taking a hit," iGATE CEO Phaneesh Murthy told Business Standard.

The company's repeated plea to accord environmental clearance has not been fulfilled by the state, which is under the President's rule since the last two months owing to political instability.

"All clearances like police and other mandatory processes were completed in quick time. Only the environmental clearance is being held up. This is due to the absence of the government in Karnataka," Murthy pointed out.

When contacted, officials at the Karnataka's Department of Environment and Ecology were clueless over the delay. "We have to follow the procedure. If it is time consuming, there is no other option," an official remarked.

Murthy said the company planned to come out with an alternative to tide over the crisis. "For us, the business has been smooth so far. The delay in expansion of the Bangalore centre will hit us badly in the long term," he added.

iGATE has various centres at multiple locations across the world. Of the 6,500 personnel that the company employs, the bulk (close to 3,000) are located in Bangalore. The rest are employed at Chennai, Noida, Hyderabad, North America, Singapore and Malaysia.

Bangalore has been the hub of the company where the new model of business "" integrated Technology and Operations (iTOPS) "" has been launched. The company is eyeing major expansion in Bangalore owing to the availability of talent and the ecosystem.