Bengal scraps Infy, Wipro land deals

Kolkata, Sept. 7 -- After wooing software giants Infosys and Wipro for six years, the West Bengal government said on Monday that it could not give them land to set up a campus in Rajarhat, a satellite township on the northern fringes of Kolkata.

Infosys and Wipro are India's second and third-largest software firms, respectively.

Seventeen days after an irate mob set on fire Vedic Village, the spa resort with bungalows near Rajarhat, leading to questions about the methods of obtaining land, the West Bengal information technology department declared an end to the 1,200-acre township designed to house the state's second software hub.

"It is impossible to proceed if the departments concerned refuse to facilitate (the project) ... We are unable to stick to our assurance of providing land to Wipro and Infosys," a press release said.

Even after the Vedic Village incident, as CPM state leaders began exploring the land mafia-politician nexus, Chief Minister Buddhadeb Bhattacharjee, 65, didn't favour the idea of terminating the deal with the software giants.

The deal was signed on April 24 last year. It earmarked

90 acres each for Infosys and Wipro in the software city. The companies had promised to invest Rs 500 crore (Rs 5 billion) each. Infosys chief executive officer and managing director S. Gopalakrishnan had assured recruiting 5,000 professionals in phases.

This would have been Infosys's maiden investment in West Bengal. Wipro has an 18-acre software special economic zone in Salt Lake in the city.

"If the promoters concerned have bought land for the IT project in excess of the permitted limits, the matter will be investigated," said Land and Land Revenue Minister Abdur Rezzak Mollah, known to be an opponent of Bhattacharjee's industrialisation policy.

Infosys director (Human Resources) T V Mohandas Pai said: "It's rather unfortunate. The government should take the initiative to acquire land for the project."

"We are awaiting a formal confirmation on this. We hope that the government is able to allocate land to build the facility," said Laxman Baliga, chief information officer, Wipro Technologies.

When the deal with Infosys and Wipro was signed last year, West Bengal Information Technology Minister Debesh Das refused to disclose the price at which the land was sold to the software majors.

It was due to the high price of land - Rs 1.5 crore (Rs 15 million)-Rs 2.14 crore (Rs 20.14 million) an acre - that both companies had held back investments in the state since 2003. Infosys had indicated four years ago that they refused to pay more than Rs 45 lakh (Rs 4.5 million)/acre, which was the maximum they paid for land in the country.

Monday's development is a personal blow to Bhattacharjee, who lost the Rs 2,000 crore (Rs 20 billion) Tata Motors project in Singur just a year ago and suffered the worst political setback of his career in the Lok Sabha elections in May.

indianachu - 05