Nano-bitten Bengal twice shy, won't let Infy, Wipro drive away

West Bengal is having a rerun of the Nano episode, but this time it doesn’t want the lead actors to exit the stage prematurely. The government is ready for whatever manoeuvres it takes to retain Infosys and Wipro projects in the state.

Since the Mamata Banerjee government is opposed to special economic zones (SEZs), it is persuading the IT giants to give up the demand for SEZ status to their projects. The incentive on offer: a juicy compensation package.

The companies have 50 acres each in Rajarhat. They got the land during the tenure of the Left Front government at a discounted rate of Rs 1.5 crore an acre. Land in the area is currently valued around Rs 12 crore an acre.

Infosys has paid the entire amount while Wipro has paid Rs 25 crore for 50 acres. At today's price, the land would be for Rs 600 crore. Interestingly, the projected investment in each campus is being pegged at Rs 600 crore for the first phase.

“Of course, they are going to look at alternatives. Otherwise, what is the point of all this discussion?” said West Bengal IT Minister Partha Chatterjee in response to a question whether the companies would look at options other than SEZs.

That was later confirmed by Wipro officials, who said the goal would be to ensure the company was able to get as many sops as possible. That, they said, would get them close to SEZ-like benefits. A better deal on the floor-to-area (FAR) ratio could be part of the package.

“The idea is to get at least 90-95 per cent close to SEZ-like benefits now that we know the government will not give us SEZ status,” said Partha Sarathi Guha Patra, vice-president and head-corporate affairs, Wipro.

Wipro already employs 7,500 people in the state and is looking to raise the number to 22,000 over the next five years. Patra said among the options that could be considered was getting land in an existing SEZ at a lower price or a better FAR deal. A better FAR ratio would allow the company to employ more people within a given space, thereby creating more value on a smaller investment.

The view is mirrored by Infosys. At a press conference yesterday, Binod Hampapur, senior vice-president and global head of commercial and corporate relations at Infosys, said the company would look at various options over the next few weeks. “There are various possibilities we need to discuss in the future. We are looking at options that may come up in the next few days,” he said.

Hampapur later told Business Standard the company would look at more details of what the government was offering. The company has said it would look at these options and they would come up for discussion in a meeting scheduled between its Executive Co-chairman S Gopalakrishnan and Chief Minister Mamata Banerjee. A special package to bring industry to West Bengal is not new. The Left Front government had done it while wooing the Nano project from Uttarakhand, a deal dubbed by it as a "trade secret". Subsequently, with the Trinamool Congress (then in the Opposition) crying foul, the Left Front government had made it public.