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Andhra may offer more tax sops to IT companies

The state government's decision stems from the fact that the proposed joint venture project of Hitech City in Hyderabad has not evinced much interest among the infotech firms.

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The Hitech City, which is a joint venture between the Andhra Pradesh Industrial Infrastructure Corporation and Larsen and Toubro, is expected to create 400,000 square feet of built-up area at a cost of Rs 800 million in the first phase. Though the construction work has been making steady progress, there have been few enquiries from the infotech industry so far.

According to representative of Larsen and Toubro, the engineering giant will only go ahead with the second phase work after weighing the success of the first phase.

Inaugurated six months ago, the Hitech City project is expected to become a supermarket for the infotech industry in the country.

According to an APIIC official, indifference of the government agencies toward the infotech firms who have apportioned land around the Hitech City has snowballed into a campaign against the joint venture project.

The Larsen and Toubro official said that the high cost of the new facility (at $70 per square feet) is keeping the infotech firms away.

However, he added that "we are still lower than the cost of Rs 5,000 per square feet at the Hitech facility created near White Field in Bangalore".

IIIT privatisation

The state government has suffered a major setback in its efforts to privatise the International Institute of Information Technology too. Of the 40-odd infotech majors, only Tata-IBM and Microsoft have come forward to participate.

The Institute would begin functioning from January.

Although a massive building has been constructed for IIIT, the government, which had offered a one-time grant of Rs 500 million, is not confident of achieving its objective of enlisting the support of international infotech majors.

Microsoft Chairman Bill Gates has already written off the State as its Indian base for lack of infrastructural facilities though he was initially impressed by the keenness of state Chief Minister N Chandrababu Naidu.

In a recent interview, Gates said that his company is still looking for an ideal location for investment which is expected to be of the order of $1 billion.

- Compiled from the Indian media

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