Sep 13, 2008

Business - India;In fresh blow,Satyam decides to quit Kolkata

HYDERABAD/KOLKATA: In what would be a further blow for West Bengal's industrialization plans, India's fourth-largest software exporter Satyam Computer Services, after dilly-dallying for the last four years, has decided to quit Kolkata. A decision to not go forward with its proposed software development centre at Salt Lake's Sector V, Kolkata's IT hub, was taken at a high-level internal meeting last week. But the move is yet to be formalized and the company's decision hasn't so far been communicated to the West Bengal government. According to internal Satyam sources, the company feels that the piece of land allocated to it in Salt Lake is low-lying and amenable to water logging, especially during monsoons. "Therefore, as such, it is not suitable for establishing a software development centre," a company source said. Satyam had been allocated 2.77 acres at Salt Lake for the software development centre. On its part, though, the Bengal government still expressed confidence that Satyam would not give up on Kolkata. "We have no reason to believe that the company wants to back out of the city because it has always appeared genuinely interested in setting up a presence in Kolkata during the frequent interactions we have had with them. We are even offering Satyam land near Vedic Village at Rajarhat (where Infosys and Wipro are each being given 90 acres) for setting up an IT SEZ which it is keen to establish," West Bengal IT minister Debesh Das told TOI. In July, Satyam had expressed interest in setting up an IT SEZ in Kolkata. As per norms, a company needs a minimum land area of 25 acres to establish an IT SEZ. "As for Sector V, our assessment is that Satyam is waiting for some more clarity on the extension of the STPI scheme so that it can take a call on how it can make use of the land allotted to it there,"Das said. The STPI scheme, which confers a host of fiscal benefits to IT units nationwide, is supposed to expire on March 31, 2010. The MoU between Satyam and Webel (the West Bengal government agency responsible for promoting IT investments) for setting up the Kolkata facility was signed on January 30, 2004, in the presence of Satyam chairman B Ramalinga Raju and West Bengal chief minister Buddhadeb Bhattacharjee in Hyderabad. The foundation stone for the Kolkata project was laid on February 24, 2006. Though Satyam had announced that it proposed to create a facility at Salt Lake that would be able to employ 2000 associates, the plans never got off. But, periodically, the company has been assuring the West Bengal government that it was "serious" about Kolkata.

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