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Global firms head for Hyderabad
Vasanth Kumar |
November 08, 2003
Arun K Maheswari, the president and CEO of Computer Sciences Corporation India, thought he wouldn't be able to meet Andhra Pradesh Chief Minister Chandrababu Naidu when he visited Hyderabad in mid-October.
After all, it was common knowledge that Naidu was recuperating after the bomb blast that wrecked his car on the way to Tirupati.
But Naidu keeps a close tab on what's happening in the software industry and knew that Maheswari was scouting for CSC's fifth development site in India and that he was checking out Hyderabad's potential.
Maheswari was surprised to find himself invited to the chief minister's home for a one-on-one session.
Says Maheswari, who is full of praise for the chief minister, "We were impressed by the commitment and professionalism demonstrated by the Naidu government."
Sure enough, soon after the meeting, CSC announced that it would be setting up a 60,000 sq ft development centre in Hyderabad.
The $12 billion CSC isn't the only hi-tech company that is pitching its tent in Hyderabad. In the last few months the rush of companies coming to the city has hotted up. Around a dozen multinational IT companies have set up shop here in recent months.
In fact, hardly a week goes by without a new company announcing that it's coming to the city. Just yesterday TCS held the inauguration ceremony for the first phase of its 320,000 sq ft development centre on the outskirts of the city.
The new TCS Deccanpark is spread over an 11-acre plot and it's estimated that the civil infrastructure and computer hardware alone cost Rs 150 crore (Rs billion).
According to Rajesh Nambiar, regional manager, TCS, the new facility can accommodate about 2,200 people initially.
"We are expecting the existing staff strength of 1,300 at Hyderabad to go up to 3,500 by 2004 and the new facility is being built up to meet the growing needs," he said.
What will Hyderabad's corporate landscape look like in a few years' time? Bear in mind that more than 2 million sq ft of office space will be available in the not too distant future.
HI-TEC city's Cyber Pearl will have a built-up area of about 1 million sq ft. Then, Oracle, Wipro, Microsoft will be creating about a million sq ft space.
Other companies are also putting up giant projects in and around the city.
Take Kanbay Inc., a $105 million US-based systems integrator, which scouted around India and then decided to build a new development-cum-learning centre in the city.
Kanbay will be spending Rs 50 crore (Rs 500 million) on the facility. Then, there's Dell Computers which will soon start taking calls at its massive 2,000-seat call centre.
The personal computer giant already has a centre in Bangalore, but the Hyderabad operation, is likely to be the bigger one.
Other companies too have settled on Hyderabad. Virtusa Corporation and Sierra Atlantic have decided to locate their second development centre in the city.
And Wipro, 24/7 Customer and Oracle which have existing operations in Bangalore are also moving to the city that Naidu is trying so hard to sell.
Others on their way to Hyderabad include biggies like CapGemini E&Y, Computer Associates and Lloyds Bank which will be setting up BPO units in Hyderabad.
Says Captain Veeresh, joint secretary on IT for the Andhra Pradesh government: "There is an influx of MNC and domestic companies. However, a lot of these MNCs are not willing to make public their plans to the media fearing a backlash at their home country on outsourcing and job cut issues."
Take GE Capital International Services (GECIS), the IT-enabled services arm of GE Capital which is betting big on Hyderabad. It has recently commissioned a third site in the city at Uppal.
With built up area of 12 acres and a total area of 27 acres, this will be one of GE's largest call centre operations.
What's drawing companies to the city? A mix of factors. The Naidu government is working overtime and doing its best to make Hyderabad an attractive destination.
Says Murari S Jagan, chief executive of Indian operations for Singapore-based Ascendas: "The cheaper real estate prices in Hyderabad at an average rental of Rs 24 per sq ft per month is driving the growth of the industry in the city." In other cities prices start at around Rs 25 and go up to around Rs 40.
Certainly Hyderabad isn't the only city where IT and BPO companies are building like there is no tomorrow. It's reckoned that the country needs a total space of about 4 million sq ft of space to accommodate the growing IT and ITES industry.
But the city is certainly attracting very large projects that will push it into an entirely new league in the near future.
For instance, Microsoft is setting up a 2,000-seat technical help desk in the city. It's the company's largest such facility outside the United States.
Don't think that only IT and BPO companies are the ones expanding furiously in the city.
The city has already been nicknamed 'Biotech Valley', by some publications. It's certainly the bulk drug capital of the country. About 60 per cent of the country's bulk drug exports take place from the city.
The city is also fast emerging as a biotechnology hub with companies such as Shanta Biotech and Bharat Biotech spinning out cheaper vaccination products and biogenerics.
The state government is developing a Knowledge Park and Biotech Park on public-private partnership basis, and the first phases of these parks sold like hotcakes.
Retailing is another revolution that the city is leading the rest of the country in.
Says Arvind Singhal, chairman of KSA Technopak, "Hyderabad has become the test bed for most of the retailing chains which are setting up either their first venture or trying new concepts here before launching them elsewhere."
Pantaloon group launched its first bargain deals market Big Bazaar here in early 2002, while the RPG group set up the first Giant Hypermarket in the same year.
FoodWorld, another RPG group retail stores chain is planning to open a flagship store at SD Road by end of this year. "We are trying to make it the best store ever launched by FoodWorld," said G V Krishnan, general manager of FoodWorld.
The Rs 1,200 crore (Rs 12 billion) -- first phase cost -- new international airport project will provide the much needed fillip to the city's infrastructure.
The first phase of the project is expected to be completed by September 2007 for handling a capacity of 5 million passengers and 100,000 tons of cargo.
The 5,000 acres of land required for the project has already been acquired by the state government.
The development of the airport was awarded about two years ago to an Indo-Malaysian consortium consisting of GMR Infrastructure Ltd. and Malaysia Airports Holdings Berhad through an international competitive bidding process.
Will Naidu achieve his aim of turning Hyderabad into a hi-tech centre that can hold its own in the world?
He's certainly putting in his best effort and the city of the Nizams should, in a few years time, be altered beyond recognition.