Bangalore casts a long shadow on tier-3 locations | SupportBiz


Bangalore casts a long shadow on tier-3 locations

An information technology (IT) special economic zone (SEZ) located in a tier-3 location in southern India, home to the country's Silicon Valley, is finding it difficult to attract technology companies, according to a state government enterprise.

The IT SEZ in Shimoga, located some 280 kms from Bangalore, houses just one company -- London Stock Exchange-listed business process and technology services firm Xchanging’s global delivery centre. The 1,000 seater campus was inaugurated in July, according to news reports.

The “response (from companies for the Shimoga IT SEZ) has not been that great” said Hari Kumar Jha, managing director, Karnataka State Electronics Development Corporation (KEONICS), the state government enterprise that developed the IT SEZ.

Large companies are probably not ready to move to tier-2 or tier-3 locations in India, Jha said. Bangalore continues to remain attractive, as far as the IT sector is concerned, for various reasons, he said.

The global economic slowdown could be another reason for very little interest in the Shimoga IT SEZ, Jha said.

KEONICS is doing its bit to promote the IT SEZ in Shimoga, which promises cost advantages to companies that set up shop there, Jha said. “We put out advertisements regularly at various forums across the country,” he said.

Xchanging is looking at expanding its base in Shimoga “to enable (the company) to leverage lower cost inflation and attrition,” CEO Ken Lever was quoted as saying in a company media release dated July 11, 2012. Their current facility can be expanded to a 3,000 seater, Business Standard reported.

The 36-acre IT SEZ is located on National Highway 206, two kilometers from the upcoming Shimoga airport and six kilometers from the Shimoga railway station. KEONICS has put in place necessary infrastructure such as roads, power and water, Jha said.

The project is being developed at an estimated cost of INR250 crore, according to KEONICS.