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Land largesse for corporate universities

Kalpana Pathak  |  Mumbai 

When the Orissa High Court on Tuesday described the Vedanta Group’s acquisition of 6,892 acres for its university project in Puri “illegal and void”, the judges were merely articulating a widespread concern.

In fact, when Reliance-Anil Dhirubhai Ambani Group (ADAG) recently got 110 acres from the Madhya Pradesh government for its foray into education, it raised many eyebrows. Ditto with Hyderabad-based Indian School of Business (ISB), to which 70 acres had been allotted by the Punjab government on a 99-year lease at Re 1 an acre, annually.

For Vedanta University, the Anil Agarwal Foundation had acquired about 4,500 acres of the 6,892 acres allotted to it.

“It’s a good revenue model and an attractive business proposition for many business houses. They get land — a resource that will be scarce a few years down the line — at throwaway prices. If they are serious about giving back to society, why don't they purchase land at market rates? The Infosys Technologies training campus in Mysore is also built over acres of donated land,” said Premchand Palety, director, Centre for Forecasting & Research (C-fore), New Delhi.

Infosys Technologies’ Global Education Centre (GEC- II is located at its 337-acre Mysore campus. Infosys spent over Rs2,000 crore to set up the centre, of which Rs1,700 crore was spent on education- and training-related infrastructure.

Industry players said a fairly good engineering institute can be set up on 10 acres. While a good management institute needs no more than 5 acres and a medical college requires 25-30 acres. “So, why does one require hundreds and thousands of acres to set up an education institute or training centre?” asks Palety.

While the Indian Institute of Management-Ahmedabad, is spread over 67 acres in Vastrapur, Gujarat, IIM-Bangalore is spread over 100 acres.

Some academicians say if the country’s premier institutes can make do with less land, there is no reason why corporate universities need so much of it. This only shows a kind of land grab, as in the case of special economic zones, where around 40 per cent of land acquired belonged to tribals.

“In the name of setting up education institutes, most of these business houses are setting up technical institutes, and not universities. Only technical education assures quick returns along with a ready pool of takers,” says the director of a Bangalore-based management institute.

Consultants advising private on their education ventures agree. “Setting up a technical institute is the easiest, as the initial investment required is low and the returns quick. Mostly, the initial cost is covered at most within eight years. That’s why most business houses aren’t interested in setting up a multi-disciplinary university,” said a Delhi-based consultant, who is advising at least a dozen on their education ventures.

He adds that many of these businessmen opt for land in states like Andhra Pradesh, Gujarat, Punjab and Rajasthan, as governments there are ready to give cheap land in the name of development.

However, officials at the All-India Council for Technical Education, the country’s technical and management education regulatory body, disagree. AICTE says it is confident that corporate houses will improve the education scenario. Possibly, this is why it is working on a proposal wherein formed under Section 25 of the Companies Act may be considered to run technical colleges.

“We believe that institutions run by business houses are more professionally managed than others. So, their request for more land is not the issue. One cannot invest a lot of money to purchase land and then set up the institute, too. We also believe they would be more transparent,” said an AICTE official.

As ISB Dean Ajit Rangnekar says, “An educational institution’s life-span does not cover years or decades, but centuries. A hundred years from now, 70 acres may limit the campus. Every major university in the world faces a severe shortage of space because the initial estimates of land were grossly inadequate.”

Most companies don’t agree with the land-grab comparison, either. Sunil Bharti Mittal-promoted Bharti Enterprises, which runs Satya Bharti Schools in partnership with state governments and a few vocational courses, plans to set up a university. “Even the thought of equating the setting up of education institutes to a way of land grabbing is bad. It’s not land for commercial use, but to create temples of tomorrow,” said Rajan Bharti Mittal, vice-chairman & managing director, Bharti Enterprises.

Amitabh Jhingan, partner and education leader at Ernst & Young, agrees. “The corporate world needs some amount of support. Land is not a large proportion of the entire exercise, anyway. The cost of setting up an institute is the highest. Besides, there can’t be a possible alternate use to the land.”

Bakul Dholakia, who has been heading the Adani Group's Institute of Infrastructure & Management in Gujarat, says if the land allotted for an education site is not being put to use properly, it can amount to land grabbing. “If you liberalise education, the demand for land for education may go up. In that case, such a situation may arise. But that is certainly not happening in the near future,” said Dholakia.

Many companies, however, are spending on the prevailing land prices instead of depending on government grants. For example, Shiv Nadar, promoter of the $5.5-billion enterprise HCL, is planning a university over 286 acres on the outskirts of Delhi and has invested in the land on his own, says an official from the Shiv Nadar Foundation.

Azim Premji University, which is being set up by the Azim Premji Foundation on 50 acres in Sarjapur near Bangalore, is buying land directly from the owners.

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First Published: Thu, November 18 2010. 00:12 IST