Andhra to revive Kokapet SEZ on signs of recovery in real estate sector

BANGALORE/HYDERABAD: The Andhra Pradesh government is reviving its Kokapet special economic zone project, encouraged by signs of recovery in the real estate sector and decline in political uncertainty in the region.

Work on the project, scheduled to begin in 2007, was held up mainly due to legal issues pertaining to ownership of land. A Supreme Court judgement on a title issue last year cleared the path for work to resume.

"The government has approached firms like Google India and DQ Entertainment to set up operations within the proposed SEZ," a senior official in the ministry of information technology said. "Companies like Mahindra Satyam, Valuelabs and HCL Tech have also shown interest in setting up facilities at the SEZ following the SC verdict."

Kokapet SEZ, proposed nearly six years ago to attract investments from the IT/ITeS sector and as an alternative to the existing IT hubs in Hyderabad, is one of several such projects in the state that could not take off due to political unrest in the region and clearance issues. According to the official, companies including Intelli Group, CBay and Infinite Computers have recently submitted their building plans.

"Of the 91 acres of land at Kokapet SEZ, nearly 40 acres are still vacant and the government is considering allotting these to the IT and ITES firms that have sought allocations. We will give priority to those who had surrendered the land earlier," he said.

The state government had in 2007 allotted land in the SEZ to 11 companies including Google India (20.01 acres), Tech Mahindra (8.43) Patni Computers (24.04), Sonata Software (7.04), Intelli Group (4), Conexant (4.36), CBay (6.42), Cognizant (9.05), Qualcomm (7.34), DQ Entertainment (2.87) and Infinite (4.85 acres). However, the project failed to take off, hitting the expansion plans of some of these companies.

The delay over the land title issue had also led Patni Computers, Tech Mahindra, Qualcomm, Conexant and Cognizant opting out of the SEZ.

"Our business has been impacted due to the delays. We had thought of shifting all our operations spread across the country to a single location," said Tapaas Chakravarthy, CMD of DQ Entertainment.

Others, like Sonata Software, decided to move to another location. Sonata now owns 78,000-sqft of space in Hyderabad and is in the process of consolidating and utilising excess space within the same facility. An executive of another company that was hit by the delay said, "We had paid 35 lakh per acre for the land but things went into cold storage. The government has approached us for setting up operations but there is no basic infrastructure facility available in that locality and none of the IT firms have done any development so far."