Watch out Bangalore, Chennai's here

Bangalore's IT czars tend to look with despair at the city's deteriorating roads, the traffic congestion, state of public transport and the like ("Cyber City or Silicon Slum?" Ice World, August 11). Many have been cocking an eye at Chennai in Tamil Nadu.

Over the past year Wipro Technologies, Infosys Technologies, Tata Consultancy Services (TCS) and Satyam Computer Services have invested in major expansion plans at Chennai. They've committed themselves to creating more than 70,000 jobs by 2008 and have taken up hundreds of acres in two key software parks on the outskirts of Chennai.

They're building what Infosys calls "the world's biggest software development centre" on a 130-acre tract. Both Infosys and Wipro plan to increase headcount in Chennai by a factor of four in the next five years.

Infosys is developing around 130 acres in a modular fashion in a 1,700 acre IT industrial park called Mahindra City, 25 km south of Chennai airport. It aims at increasing headcount 10-fold to 30,000 in five years.

Wipro was allotted an additional 85 acres to expand its 15- acre campus in Sholinganallur in the IT corridor, a 25-kilometre stretch running from Tidel Park to Siruseri, home for a 1,000-acre industrial park being set up by the State Industries Promotion Corporation of Tamil Nadu (Sipcot).

TCS has already taken up 70 acres in Siruseri, with others such as Polaris, Patni Computer Systems and Cognizant Technology Solutions laying foundations for huge campuses.

As a result, Chennai is likely to overtake the National Capital Region (NCR) "� including Delhi "� to become the second largest job creator along with Mumbai with around 35,000 jobs this year, a survey by "The Times of India" suggests.

Bangalore still tops the list, with more than 65,000 jobs in the IT and BPO industries likely to be created this year. NCR adds around 30,000 jobs, followed by Hyderabad and Pune.

IT businesses in Chennai will be housed in the suburbs along the old Mahabalipuram road and in the Mahindra IT city. The Old Mahabalipuram road, starting from the tech-infested 1-million sq ft Tidel Park and going up to Siruseri initially and later further down to Kelambakam, is a dusty paved road lined by small businesses, eateries and a few old cinema houses.

Along the way the IT corridor's small town look is broken up by the huge glass and concrete structures of the likes of Infosys, Satyam and Cognizant Technologies.

In Siruseri, the tail of the IT corridor, Sipcot's 1,000-acre barren land is dotted by a lone 27-acre Xansa development centre, a small building housing the Sipcot project office and a few cows grazing on a TCS site. The main arteries are paved and lit, with nearly eight kilometres of optical fibre cable running through the park.

"We are completely sold out," says state information technology secretary Vivek Harinarain. At around Rs 12-16 lakh an acre, companies such as TCS, Cognizant, Xansa and others have taken several acres with a Singapore developer taking up more than 100 acres for a residential township.

There are also plans to build a knowledge township along the IT corridor, which runs parallel to yet another stretch dotted with amusement parks and recreation facilities (dubbed an entertainment corridor), to create support services for IT professionals. A narrow four-lane road is to be widened into a six-lane way, though there are no visible signs of this as yet.

Indeed, a Harvard University paper "Readiness for the Networked World: A quiet Information Revolution in Tamil Nadu", predicts that Tamil Nadu is well poised to emerge as the top IT state in India as well as a gateway to south east Asia.

All this reflects a startling change "� Chennai was known more for fisticuffs in the assembly, brigand Veerapan's exploits and political theatre. Sure, it had a strong industrial base comprising automobiles, auto components, machine tools, textiles and power industries, and plenty of human resources. The state was also always much more reliable and cheaper than its neighbours.

In December 2001, Harinarain took over as Tamil Nadu's information technology (IT) secretary. What both technology companies and the then political czars of IT cities Bangalore and Hyderabad "�

S M Krishna and Chandra Babu Naidu, respectively, didn't know was that the new chief minister, Jayalalitha Jayaram, asked Harinarain to fashion a new IT policy and coordinate infrastructure development.

Chennai's main problem was marketing. "In terms of perception we had a problem," said Harinarain. A new software policy announced in September 2002 underpinned Harinarain's plan to hardsell Chennai as an investment destination along with the Electronics Corporation of Tamil Nadu (ELCOT). "That led to a refocus by domestic and foreign software companies," says Harinarain.

More recently, the Tamil Nadu government slashed the approval time for commercial buildings dedicated to IT and ITES to less than three weeks from several months earlier. In addition, it is already looking at Coimbatore and Hosur as tier-2 cities to develop more IT parks.

Chennai has a couple of other advantages too. Around 25 universities and 250 engineering colleges in and around the city churn out around 60,000 engineering graduates a year, of which nearly 35,000 specialise in IT.

MphasiS BFL's vice president, finance, BPO, Jacob Mani says that Chennai is very favourable for IT-enabled services because of its pool of good, cheap human resources. "Our greatest USP is human resources," adds Sudeep Jain, managing director, ELCOT.

What is more, electricity supply is less of a concern in Chennai than in Bangalore because there are few power cuts and suburban development is reducing congestion inside Chennai. But Chennai's water problem may persist for quite some time, say people who live in the IT belt. Ground water is of poor quality and water treatment plants are required.

Sipcot now supplies water at Rs 22 per thousand litres from a nearby water source but there is no knowing when it will dry up. Harinarain is counting on a Rs 1,000 crore desalination plant coming up in Chennai and on some Chennai residents shifting to the suburbs to alleviate the water situation.

Still, Chennai's bid to become India's next big IT city has to be seen in perspective. Of the 20 million square feet of space to be taken up by IT and ITES companies this year, Chennai could offer only 0.6 million sq ft "� well below Bangalore with two million sq ft and Pune with 1.45 million sq ft, according to CB Richard Ellis, the real estate company.

Software exports from Tamil Nadu have spurted from a low Rs 393 crore in 1997-98 to Rs 8,100 crore in 2003-2004, according to Electronics and Computer Software Export Promotion Council. The figure for Karnataka's software exports: Rs 19,400 crore.

So Bangalore is still top of the IT city heap. Chennai will, no doubt, give Bangalore a good run for its money but Vivek Kulkarni, former IT secretary of Karnataka and now CEO of B2K, sums up the position when he declares: "Bangalore, Chennai and Hyderabad complement one another. There is no competition."

Look at the infrastructure in the works

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• Tidel Park (seen in the picture) is an advanced IT park with 1.3 million sq.ft of space
  
  
• A 1,000-acre IT park is being developed by Sipcot at Siruseri 20 km from Chennai
  
  
• A 1,700-acre IT Industrial park called Mahindra City, 25 km south of Chennai airport
  
  
• A 25-km IT corridor has been set up which is already home to IT companies like Verizon, Infosys Technologies, Tata Consultancy Services, Wipro Technologies, Xansa, CTS and Polaris
  
  
• The IT corridor runs parallel to the entertainment corridor along the scenic east coast highway
  
  
• The existing four-lane highway is being widened to a six-lane highway at a cost of Rs 128 crore