Kerala bets on public-private partnership in IT

By Venkatachari Jagannathan, IANS,

Chennai : Kerala would rather emulate Tamil Nadu than Karnataka, considered the cradle of India’s information technology (IT) industry with its own Silicon Valley in Bangalore, to attract IT infrastructure investments.

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“We don’t want to repeat Karnataka’s mistake of promoting just one city, Bangalore, as the destination for IT investments. We would rather follow Tamil Nadu’s model,” N. Radhakrishnan Nair, director of Kerala State IT Infrastructure Ltd (KSITIL), told IANS.

Tamil Nadu, leveraging the spread of industrialisation across the state, is promoting tier two cities like Coimbatore, Madurai and Tiruchirapalli as IT park and special economic zone(SEZ) destinations.

It is this recipe that Kerala has decided to follow, said Nair, who is also chief executive of Technopark, the IT hub in Thiruvananthapuram.

“Our idea is to develop IT parks in all districts in the state. The two major IT parks, Technopark in Thiruvananthapuram, and Infopark in Kochi, will be the hubs while the proposed district IT parks will be the spokes,” Nair said.

The Kerala government has acquired land in Kozhikode for a proposed 75-acre IT park, called Cyberpark. Land is also being acquired in other districts for setting IT parks and SEZs.

Similarly, Nair said 100 acres of land has been acquired for the proposed 500-acre integrated IT township project, Technocity, on the Thiruvananthapuram-Kochi highway.

Another 200 acres would be acquired by the month-end and the entire land acquisition expected to be completed by the year-end, he said.

Unlike Tamil Nadu where several private promoters have built IT parks, Kerala’s focus is on public-private partnerships with KSITIL as the primary vehicle.

KSITIL is a proposed joint venture with the Kerala government holding 51 percent share and the balance to be held by private equity investors and non-resident Indians.

Nair said the process to select a consultant to advice on attracting private investors is on.

“Once the partner and funds are in place, separate special purpose vehicles (SPV) will be formed for each project, in which KSITIL will hold 26 percent and private promoters the balance.”

This will be done for developing for the ambitious Technocity project as well.

As per plans, the project land will be parcelled into six lots and allotted to different private developers.

A special purpose vehicle will be formed with each developer, with KSITIL holding 26 percent share and the developer owning 74 percent.

“We have got 10 Requests for Qualification (RFQ) proposals from real estate developers, which will now be scrutinised,” said Nair.

While that is for the future, Technopark, the single largest IT park in the country spread out on 260 acres and generating an annual revenue of about Rs.400 million, will also be expanded.

“In the first phase, we developed Technopark and rented out the premises. In the second phase, land was allotted to companies such as Infosys Technologies and TCS which in turn built the infrastructure. Now, in the third phase, we will acquire the land and develop the infrastructure jointly with private players,” Nair said.

The third phase expansion will be on 100 acres, and land acquisition is about to be completed.

According to Nair, the state has targeted creating 200,000 jobs in IT by 2012, compared to the 40,000 currently.