A few days ago, the Union Government introduced the idea of Information Technology Investment Regions (ITIRs). These are designated areas with an extent of at least 40 Square Kilometres (10,000 acres) in which a combination of IT/ITES industries, electronic hardware manufacturing facilities and infrastructure facilities. The State Government would ensure that all physical infrastructure and utilities including power, water, roads, transportation, sewerage and effluent treatment facilities are provided. The Central Government would facilitate the development of national highways, airports and rail link to the ITIRs. Such regions could include integrated townships, SEZs and industrial parks, amongst others. The availability of social infrastructure in the integrated townships would allow these regions to attract investment, create employment opportunities, propel economic growth and simultaneously reduce the pressure on existing urban centres.
The ITIRs would not offer any tax sops or fiscal incentives per se, but provide an excellent infrastructure and investor-friendly policies. These regions would be developed in a phased manner through the Public-Private Partnership (PPP) route, and the State Governments would select the developers and co-developers of such projects.
The Union Government seems to have realised that creating hundreds of small SEZ scattered across the nation is not an efficient option in terms of land use, infrastructure or even urban planning. Consider for example, two IT/ITES SEZs which are 50 Kms apart. To ensure that the projects take off, land connectivity and utilities have to be provided for both separately. Both projects will have to have independent electricity sub-stations, water and sewage treatment plants etc, all of which waste precious land. Now consider if the two SEZs were right next to each other, if not as one project. The facilities including road access could be unified. Not only would the cost be lower but less land would be needed for utilities and other non-processing facilities. Another aspect is the debate about the cost-benefits of SEZs where it is argued that the Government is foregoing immediate returns (taxes) for expected long term benefits (employment, development etc). Both these issues are being addressed by the ITIRs where all the processing facilities are being brought together in one region and served by common social and supporting infrastructure. The hope is that the mere availability of quality infrastructure and investment-friendly policies will attract investors, even in the absence of monetary sops.
40 percent of the area of the ITIR – about 4000 acres – needs to be developed into processing areas. It might be possible to have this seemingly massive area in several parcels, all of which lie inside the boundary of the ITIR. By having social infrastructure – in the form of residential units, shopping malls, hotels, hospitals and schools – located within the ITIR, through the development of integrated townships, the idea is to avoid creating copies of the congestion now being experienced in Bangalore, Chennai or Gurgaon. And using the PPP route ensures that most of the initial investment is made by private developers.
The Government of Kerala already owns nearly 1000 acres of land – already developed as or to be developed as IT parks – in Trivandrum. This is made up of the three phases of Technopark along with the Technocity project. The latter is the largest IT project in Kerala, with investment estimated at upwards of Rs 6000 Crores and a projected 100,000 employment opportunities generated by 2012. Technopark and Trivandrum account for over 70% of Kerala's IT industry. A National Highway and main State Highway – both 4-lane – and a main railway line pass through the area, while an International Airport and deepwater sea port are only a few kilometers away. And all this within the suburbs of a metropolitan city. It doesn't take rocket science to realise that the perfect place in Kerala for an ITIR lies in the north-western suburbs of Trivandrum.
Ideally, the ITIR can extend along the National Highway from Technopark Phase II till the Mangalapuram Junction which marks the Northern boundary of Technocity. The central axis will then deviate along the Mangalapuram – Pothencode road and then onwards to join the M.C. Road at Venjaramoodu, stretching for about 20 kilometers overall. This will encompass all of the existing IT developments as well as areas along the Mangalapuram – Pothencode – Venjaramoodu axis which have large, relatively uninhabitated plots which can be aggregated to provide the 3000 Acres of land needed for the ITIR. Rather than extend the ITIR all the way along the National Highway to Kollam, this approach ensures that it never lays more than 20 Kms from the International Airport or from the core urban areas of the city. With the development of the NH and the M.C. Road already in progress, the State Government only needs to enhance the interlinking roads. Planning further ahead, the Mangalapuram – Venjaramoodu link road can be extended via Nedumangad to Balaramapuram or Neyyatinkara to form the Outer Ring Road for Trivandrum. As facilities like electricity and water supply and sewage treatment are already planned for the Technocity project – which is an integrated township – it will only be required to scale up these plans to meet the demands of the first phase of the ITIR.
Thankfully, this seems to be one wave that Kerala seems intent not to miss. The Government has already decided to develop an ITIR at Trivandrum, according to reports quoting Dr. Ajay Kumar, the IT Secretary. No prizes for guessing where it will come up. Trivandrum is already the leader among Tier – II IT/ITES destinations (like Chandigarh, Bhubaneshwar, Jaipur and Mysore). Unlike the existing IT hubs, it is still free of congestion and can offer an attractive swathe of land, free of major habitation yet close to the city and its facilities. Morever, Kerala's relative paucity of existing SEZs can be used as a strength, to justify an ITIR to speed up the pace of development. If the current tempo set by the Government is kept up, there is a very good chance that one of the first ITIRs in India could indeed be set up in Trivandrum.
(The article was written for and will be published shortly in the first e-newsletter of the Trivandrum Development Front.)