Despite both the Union Minister for Communications and IT Kapil Sibal and IT Minister of Andhra Pradesh Ponnala Lakshmaiah talking of promoting IT and ITeS in tier-II cities, nothing has moved favourably in Vijayawada, in the face of Software Technology Parks of India (STPI) setting up shop in 2001 and APIIC promoting an IT SEZ in collaboration with construction major Larsen and Toubro Infocity Limited in 2007.
There are about 36 IT/ITeS companies in the city, with 22 coming under the STPI fold, four in L&T Hitech City (SEZ) and the remaining come under non-STPI and non-SEZ fold.
In the last fiscal all the companies combined accounted for Rs. 98 crore, including Rs. 30 crore exports. And the total manpower employed in this sector is just about 2,500.
To encourage investment, STPI is all set to construct three IT towers with a floor space of 67,000 sft each, soon, and the L&T Hitech City has already developed 30 acres.
“We already have one building with state-of-the-art facility with 2 lakh sft ready, but only 24,000 sft has been occupied so far by four firms. So what is preventing the players to come in?
“The main reason is the lack of political will from the local leaders. Even local entrepreneurs prefer to invest in other cities,” said Efftronics Systems Managing Director and Convenor of Krishnaveni Information Technology Association (KITA) D. Rama Krishna.
The operating cost is less by 40 per cent compared to tier-I cities, the attrition rate and HR costs are low, the city is well connected, start-up level techies are in abundance and the operating facilities be it at Hitech City or STPI’s proposed IT Towers are on par with any of the tier -I cities, said Mr Rama Krishna.
HCL Technologies had recently toured the city and visited the Hitech City.
They are proposing to set-up a 4000-seat facility, with a start-up of at least 500 seats, a senior official from L&T said.