June 11, 2009

Infosys drops West Bengal project

KOLKATA, JUNE 07, 2009: As far as Infosys goes, the West Bengal story is as good as over. Neither has the state government shown any interest in pursuing Infosys, not does the company see any urgent business need to begin operations there. In 2004 Infosys had planned to invest Rs 500 crore in setting up a development centre, seating 5,000 people, in Kolkata.

Infosys CEO Kris Gopalakrishnan told Financial Chronicle that the company was forced to have a “relook” at its plans in West Bengal. It had sought up to 100 acres of land, but it was not satisfied with the plot offered.A couple of months ago, West Bengal’s minister for information technology and biotechnology, Debesh Das, had told reporters in Bangalore that his government was planning to provide land to Infosys this year.“There seems to be no communication on this. So we have decided to put the project on the backburner,” said Gopalakrishnan.“The new economic environment is not conducive to any expansion. So that’s a consideration as well,” he said. “Instead, we plan to focus on ongoing expansion at Pune, Chennai and Hyderabad.” Infosys plans to add 20,756 seats this year to take the total to 1,15,000.

Infosys is facing problems also in the Sarjapur project in Bangalore. The company has tied up about 300 acres “but land conversion has not taken place yet,” Gopalakrishnan said. The project has been on the drawing board since 2000 when Infosys had asked the Karnataka government for 845 acres. This was refused. Three subsequent requests were approved but the project has not moved an inch since controversies arose after former prime minister Deve Gowda questioned the company’s land acquisition motives.

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