Tech 8211; II

Cyberabad is stretching its wings. The spanking new city that hitched its star to infotech and biotech at the turn of the millennium is cranking up its infrastructure to emerge as the country8217;s new Silicon Valley, even as first edition Bangalore and wannabe IT-cities across the country cope with their growing pains.

Guilt Edge
ON the south-west fringe of what is now Hyderabad, nearly 20 km from the present city centre, spilling over into the neighbouring Ranga Reddy district, a brand new Hyderabad is taking shape. An area of 458 sq km has been identified to give the city the edge it needs to beat the competition.

At the heart of this fast emerging hub are the city8217;s under-construction international airport and an 8,000-acre zone currently known only as the 8216;Hardware Park area8217;. This is where the Andhra Pradesh government is putting up infrastructure necessary to fuel the next wave of the Information Technology revolution.

After bagging the huge deal from AMD-SemIndia, Andhra Pradesh government officials are now excited by the strong feelers emerging from Intel, the world8217;s biggest computer chip manufacturers. They have shown keen interest in investing in a facility at the 350-acre Rajiv Gandhi Nanotechnology Park being created by the government and Korean technocrat June P Min.

Indian IT major Infosys, which has been seeking 700 acres of land for expansion at its Bangalore headquarters, have now agreed to set up a second campus in Hyderabad after being offered 400 acres in the Hardware Park area, according to Andhra Pradesh IT minister Sabitha Reddy.

8216;8216;We need to expand. If somebody is going to give us land, treat us well and go out of their way to welcome us, we are going to accept their offer. Hyderabad has good infrastructure, a pro-active government and a vibrant software industry. They have offered us land. We have responded favourably,8217;8217; says Infosys chief financial officer T V Mohandas Pai.

8216;8216;The IT industry in Hyderabad is set for take-off. It has taken us many years to get here. Bangalore has gone beyond this stage and has now gone flat,8217;8217; says AP IT secretary K Ratna Prabha.

Beating the Best
WHILE Bangalore did have a headstart in the IT race, it is Hyderabad that is beginning to shine these days. The evidence lies in the world-class and the second- and third-round of investments by Indian and multinational companies8212;not to mention the new investors.

Hyderabad has notched higher IT export growth rates than Bangalore in the past couple of years. In 2004-05 Hyderabad registered IT exports of

Rs 8,270 crore, a growth of 64.5 per cent on 2003-04 figures. Bangalore, on the other hand, registered IT exports of Rs 19,400 crore in 2004-05, a mere 10 per cent more than its 2003-04 figures.

For the current fiscal, Bangalore has registered a growth in exports of 30 per cent till December 2005. According to AP IT officials, Hyderabad has registered a growth of 61 per cent for the same period8212;the highest for the country.

8216;8216;More than fresh new investments, it is really the setting up of second units by several companies in Hyderabad that is fuelling growth. For this to happen infrastructure needs to keep pace with growth,8217;8217; says economic policy adviser to the AP government D A Somayajulu.

Land8217;s End
TO do that, the Andhra Pradesh government has been following a strategy where it identifies and picks up land through the Andhra Pradesh Industrial Infrastructure Corporation APIIC8212;once a sleepy organisation, now the fulcrum of growth8212;well before there is demand for the land, thus keeping land costs down.

Add to that one of the lowest cost of operations in the country, and you get a fair idea why the investors can8217;t stay away.

8216;8216;We are looking at acquiring at least another 5,000 acres in the Hardware Park area alone. The IT industry itself will need another 4,000 acres of land in Hyderabad for infrastructure,8217;8217; says an APIIC official.

However, Chief Minister Rajashekhar Reddy was recently informed that land sharks have also started employing a similar strategy around Hyderabad in order to cash in on the growing premium for land around areas known to be on the government8217;s infrastructure development programme.

While the average value at which government is acquiring land is about Rs 500/sq m, Hyderabadis received a shock recently when a 23,659 sq property in the posh Jubilee Hills area was bought for Rs 1.41 lakh per square metre by an ICICI-led consortium.

8216;8216;We have not reached a stage where we cannot allot land. But, increasingly, we are finding that we have to be choosy about the land we want to buy since land prices are only going up,8217;8217; says Ratna Prabha.

Fly by Right
WHILE southern Hyderabad is the IT industry8217;s new destination, on the western side, 35 km from the city centre, in an area called Pashamylaram, a new industrial park is coming up for non-IT industries, primarily textiles.

While creating infrastructure inside and outside the present city, the Hyderabad Urban Development Authority and the Municipal Corporation of Hyderabad have also worked at smoothening access to the new hubs from the city.

As many as 14 flyovers have been constructed in the past four years while 26 are in various stages of execution. The MCH increased expenditure on flyovers, bridges and subways by over nine-fold for the current fiscal, from Rs 7.50 crore to Rs 75.40 crore.

A real push to improve the roads in Hyderabad came in December last year and early January 2006, ahead of the Pravasi Bharatiya Divas and the AICC plenary.

8216;8216;In less than two months between December 2005 and January 2006 the government broadened and improved the 15-km stretch from the current airport to the Hitec City,8217;8217; says N T Shashankan, an IT professional working at Hitec City.

Across industry and the government, the general feeling in Hyderabad is that infrastructure is improving because the government has shown the will to do it. 8216;8216;It is only the will of the administration that is fuelling this rapid infrastructure boom. What Naidu started has been continued by Reddy,8217;8217; says an APIIC official.

8216;8216;While the present CM does not appear to be promoting Hyderabad and its new economy, he is silently championing it,8217;8217; says a senior AP IT department official.