Kerala lines up Rs 20,000cr to attract IT companies

The Kerala government has come out with an over Rs 20,000-crore investment package to promote the state as an IT destination. The state’s main target is IT and ITeS companies that are planning for further expansion in Chennai and Bangalore.

Through its arm Kerala State IT Infrastructure Limited (KSITI), the government is planning to set up an IT city and IT parks across the state, which would have a seating capacity of 200,000 people by the year 2015. KSITI will promote these projects through the public-private partnership model.

The two key marketing words for KSITI are ‘continuous power supply and single-window clearance’ which saw the participation of several top companies in the roadshow held in Chennai recently.

N Radhakrishna Nair, director, KSITI and chief executive officer of Trivandrum Techno Park, said that Kerala, which was promoting tourism as ‘God’s own tourism country’ now want to promote it as ‘God’s own e-state’. The IT/ITeS sector contributed around Rs 5,000 crore to the state last year.

The state government is planning to set up a Techno City, spread over 500 acres, in Thiruvananthapuram with an investment of between Rs 8,000 crore and Rs 10,000 crore.

Land acquisition for the new facility, which will come up in close proximity to the existing Techno Park, is in the final stage. The Techno City is expected to be ready by 2015. It will have facilities including residential flats, hotels, shopping malls and theatres.

KSITI is also planning to expand the 130-acre Techno Park. The company had acquired another 200 acres. Infosys and UST Global have already started the construction work.

Both these companies are planning to invest around Rs 1,000 crore. Currently, the park employs around 20,000 people and by 2012, it is expected to employ around 100,000, Nair said.

When the Techno City and expanded Techno Park will become operational by 2015, around 200,000 people will be employed.

Speaking about the advantages, Nair said, “Low-cost and uninterrupted power and single-window clearances are the two main mantras. For instance, for IT/ITeS, the state is supplying power for Rs 3.20 a unit, while in Chennai it is around Rs 3.50 a unit (only for IT companies not for ITeS). In Kerala, since all the IT parks will be located near the power grids, companies do not have to depend on the local electricity boards.”

If a company wants to set up a facility in Kerala, it will not take more than 4 weeks for all the necessary clearances, Nair said.

In Chennai, Infosys waited for four years to obtain approvals for its Mahindra City facility. The Kerala government has created an industrial area Act, which will allow the CEO of the park, who is a non-IAS officer, as the signing authority.