September 9, 2009

West Bengal drops IT township project

KOLKATA,7th August,2009: The West Bengal government on Monday announced that it “cannot proceed” with the proposed joint sector Kolkata Link IT township project near Rajarhat in North 24 Parganas district following allegations of land grabbing and the recent arrest of managing director of a firm, which is a private partner.

This is a setback to the State’s plans to develop the IT sector.“The government does not want to be involved in any illegal activity. Thus the IT department cannot proceed with the project …,” a release said.

“Under the circumstance, we are unable to stick to our assurance of providing land to Wipro and Infosys.”Major IT companies had already sealed agreements with the State to set up facilities in the township. The project was to have come up on 1,200 acres.
Press release by Information Technology Department, Government of West Bengal
(Enclosure to 15(50)- JS(SB)/IT(O)/91/2007 dated 07.09.09)
Recently, all of us came across several conflicting news items about Kolkata Link IT township. Though IT Department do not like to comment on each and every news item, we believe that all these created a lot of confusions among the people, specially the actual stakeholders of this project including several IT companies and thousands of young aspirants who want to be employed in their own state after their studies.
To clear the confusion and to avoid any further confounding, IT department decided to provide the necessary information about this project in written form. That is why the IT department is releasing this press note. We believe that everyone should have the right to know about this township plan, its present status and its fate. To make it more visualized and to help the people to have more access to the information, IT department has decided to publish it in the website of IT department Anybody who has any query about this press release can send the questions to or send them through fax to the number 22821944. It will be answered as quickly as possible in written form and we will also provide it in the website of the department. It may please be noted that the questions should relate to this press release only.
1. Background
(i) Despite continuous efforts land could not be offered to some key IT companies who have been demanding the same since 2004-2005. This had been hindering the growth and depriving the state from realizing its full potential in this field. Three of the top five employers are TCS, Wipro and Infosys. All are expected to grow @ 12.15% per year in today’s tough times and @ 30% in the good times.
(ii) Reputed IT companies like Wipro, Infosys were very much interested to get the land at New Town Rajarhat. But the price of that land deterred them to take it.
(iii) In the middle of 2006 Infosys was shown land near vedic village by WBIDC. The state Government planned to make land available for Infosys and other IT companies near Vedic village by March 2007. But this land could not be acquired till date.
(iv) The State Government in general and IT department in particular were under tremendous pressure as the Government had failed successive dates for acquiring and handing over land to Infosys and other IT companies.
(v) Failing to get land in West Bengal several IT companies like Infosys, Zensar and Wipro started taking land and expanding their base in adjacent state, Orissa.
2. IT department’s initiative
To address this impasse, IT department explored all the available options: land acquisition, land purchase and public private partnership.
(i) IT department arranged Government land at Kalyani. This site did not become acceptable to the industries. We could succeed to arrange the visit of Wipro there, but they did not like to take it.
(ii) IT Department started acquiring land through Land and Land Reforms Department at Jagadishpur Mouza, which came under opposition. In September, 2008 the notice under section 4 was given which sparked off agitation. In May, 2009 the notice under section 6 was given. However, due to public agitation, it was stalled. IT department was offering a high price for acquisition – about Rs. 1.10 lakh per cottah (evidence shows that it was much higher than the market price).
(iii) When the Government failed to provide land and accommodate IT companies, a private company on its own initiative contacted Infosys and offered them land in the area close to Airport and Rajarhat New Town. Infosys visited the area a number of times and agreed to take the land and come here provided the Govt. was involved in the project. The company also engaged the renowned architect of the country, Hafeez Contractor, whose services are extensively used by Infosys also for their projects.
(iv) This private company, namely, M/S Akash Nirman Pvt. Ltd. offered a proposal to IT department for an IT township in this area. They gave an undertaking to assemble land for the development of this integrated IT Township. It proposed to hand over 50% of the land assembled free of cost to Government to allot land to IT companies. Towards this the company was willing to enter into a joint venture agreement with Webel for the creation of a joint sector company for the development of an integrated IT township complete with required social infrastructure like commercial complex, convention centre, housing, food court, hospitals, gymnasium, training centres etc. In lieu of sharing 50% of land with Webel/Government for allocation to IT companies, the Joint Venture partner expected Webel to take the responsibility of providing the road connectivity for this township as well as the other required physical infrastructure facilities like power, water supply, sewerage disposal, etc. at the doorstep of the proposed project area.
3. Cabinet Approval
With this background and taking into account the urgent requirement of land by some key IT companies (Wipro, Infosys, ITC Infotech, ICICI, etc) the IT Dept. prepared a Cabinet Memorandum for entering into this partnership for the establishment of this IT township.
The cabinet memo was submitted to Finance Department, which made some observations. All observations of the Finance Department were accepted by the IT Department including the condition that the expenditure to be incurred on infrastructure should not exceed the amount realized by providing land to IT companies. The memo was then placed before the Cabinet Standing Committee on Industry which approved the above proposal in its meeting on 28th February, 2008. The members present in this meeting were - the Chief Minister, C & I Minister, Finance Minister, MSME Minister and IT Minister. This was later mentioned and ratified by the full Cabinet in its meeting on 17th April, 2008.
4. The Proposed IT township and Vedic village resort are totally separate
As per the master plan the southernmost point of the township touches HIDCO area, which is about 7 kms away from Vedic Village where it ends. The proposed township does not include the Vedic Village Resort. However, the owner of Vedic Village Resort is one of the Directors of Akash Nirman Pvt. Ltd.
5. Land to Wipro and Infosys—
IT Dept. signed separate MOU on 03/04/08 with Wipro and Infosys to hand over 90 acres of land each to the two companies at the IT township. The representatives of Wipro, and Infosys along with IT Department met the Chief Minister on 24/04/08 to seal these agreements.
6. Nothing Concealed from Public/ No Clandestine
In a joint press conference of IT Department, Wipro and Infosys on 24th April, 2008 all details of the township project were spelt out openly before the press. At no stage did the IT Department try to hide it from the public. All the news agencies carried it as the lead story on 25th April, 2008. Besides, it was reported in detail several times in the leading newspapers (Ananda Bazar Patrika 08/06/08, Times of India on 04/03/08). It was also articulated in the Annual Report of the IT Department and the budget speech of IT minister. The project is thus well known.
7. A Joint Sector Company was formed
As per cabinet approval, the Joint Sector company namely “WEBEL Akash IT links Pvt, Ltd.” was formed on 26/09/08.4
8. Involvement of other Departments to facilitate the Project
(i) Housing Department: IT Minister wrote to Housing Minister on 29th May and 24th September 2008 and the Principal Secretary, IT wrote to MD, HIDCO on 13/06/08 informing about project and seeking road connectivity and access to HIDCO area. HIDCO in its letter dated 4th July 2008 to the IT Department agreed to provide the access road connecting the said township with HIDCO and asked IT Department to bear the cost for this connectivity.
(ii) Land and Land Reforms Department: Letters were issued by the IT Department to Land and Land Reforms department on 04/05/08, 05/08/08, 25/08/08, 27/08/08, 22/09/08, 26/09/08, 17/12/08, and 22/12/08 asking for the required clearances. The L&LR Department issued an order on 11/12/08 allowing the Joint Sector company and its constituents to hold land in excess of ceiling limit.
(iii) Urban Development Department: The IT Department wrote to the UD Department on 04/07/08, 19/08/08, 27/08/08, 24/09/08, and17/10/08 asking for the required clearances and notification. The UD Department issued the notification on 17/11/08 declaring the Project Area as a Planning Area under the Town and Country Planning Act along with the constitution of a Planning Authority. The UD Department again issued a letter on 03/12/08 concerning the Planning Area. The Planning Authority constituted includes representatives from the IT Department, the UD Department, KMDA, District Administration—North 24 Parganas, South 24 Parganas and Finance Department. The first meeting of this Authority was held on 27/05/09.
(iv) PW Department: Letters were issued by IT Department on 27/08/08 and12/11/08. PWD was requested to strengthen and widen the existing road of 211 Bus route which connects the township.
(v) Irrigation and Waterways Department: Letters were issued on 4/7/08 and 12/11/08. Officials of this Department surveyed the area for the sewerage canal and connectivity of this township.
(vi) Power Department: Meetings were held with official of Power Department to meet the power requirement of the township.
(vii) Chief Secretary’s Review meetings with concerned Departments:Meetings were held under the chairmanship of the Chief Secretary on 26/5/2008, 13/8/2008, and 22/10/2008 where the progress of this Project was reviewed. In the meetings the officials of the concerned Departments including Housing, Urban Development, Land and Land Reforms, PWD, Power, Irrigation and Waterways, District Administration of North and South 24 Pgs were invited.
9. Another Cabinet Approval
UD Department mentioned its Notifications of Planning Area concerning the said project in the Cabinet meeting on 27/01/09 and got it ratified.
10. The present position
(i) IT Department has or had no connection or role in purchasing process. Moreover, the Department had no whiff of any forcible purchase.
(ii) In May 2009, IT Department got a list of 90 acres of land from the private partner that could be given to IT companies. Immediately on 27/05/09, WEBEL provided the details of the 90 acres of land to Infosys. Infosys informed IT Department that though they were keen to take the land, they preferred to go slow at present in view of the global economic slowdown.
(iii) An understanding was reached with Wipro to provide them 50 acres of land to them. The land is ready. The IT Department is looking into the details of this land (whether it is contiguous, whether it has valid registration, mutation etc.).
(iv) No land has been transferred till date to either WEBEL or the joint sector company Webel Akash IT Links Pvt. Ltd.
11. The effects of recent incident surrounding Vedic Village
(i) In a recent incident, the Managing Director of the Private Partner has been arrested by the police;
(ii) The Government does not want to be involved in any illegal activity;
(iii) Already, some Departments have opined to scrap the project;
(iv) It is also impossible for IT Department to proceed with the project, if any of the six Departments mentioned in section 8 refuses to facilitate;
(v) Thus IT Department cannot proceed with the project; and
(vi) Under the circumstances, at this moment we are unable to stick to our assurances of providing land to Wipro and Infosys and thereby constrained to inform them about the Government’s inability.