The Hindu : Tamil Nadu / Chennai News : `Guindy estate, better bet for IT firms'

Online edition of India's National Newspaper
Monday, Jun 20, 2005

Tamil Nadu

Tamil Nadu - Chennai

`Guindy estate, better bet for IT firms'

N. Ravi Kumar

It plays host to hundreds of sick units of old economy and emerging as destination for IT firms

THE TWO FACES: The Guindy industrial estate might become a destination for IT firms, but garbage mounds such as these remain an eyesore. — Photo: Shaju John

CHENNAI: : The Guindy industrial estate presents a study in contrast, as it enters the golden jubilee year, playing host to hundreds of sick units of old economy and emerging as a destination for more and more information technology firms.

Besides the difference in the landscape, ritzy new buildings compared to old concrete structures, the divide is apparent in the varying levels of contributions by the units towards a Rs.12.6-crore public-private partnership to upgrade the estate's infrastructure.

New entrants contribute

While 210 of the 600 units reeling under the impact of industrial sickness could not pay for the scheme, to be implemented by the Tamil Nadu Road Development Company Limited (TNRDC), eight of the new entrants are likely to contribute Rs. 2 crores.

Of these, five companies promoting IT buildings, including Ramaniyam Real Estate, will pay Rs.25 lakhs each.

Out of the 210 units, 150 are located on one ground and above, while the rest are on smaller patches.

"There cannot be a better property than Guindy for the IT sector. It is close to the railway station and the airport, and surrounded by several residential localities that can supply the manpower," says V. Jaganathan, managing director, Ramaniyam, which is implementing two IT building projects on four lakh square feet.

On the relatively higher contribution by a few companies to the infrastructure upgrade programme, he says: "Though I am sceptical about the completion of the project before this December, there are no second thoughts on the contribution as the corresponding benefits will be more."

One of the major advantages for the IT companies locating their operations in the estate will be less expenditure on transport of employees. According to sources in the estate, the Chennai Metropolitan Development Authority had approved eight more projects involving IT buildings.

The infrastructure programme, for which the TNRDC has appointed a consultancy to conduct a survey for quantifying the work, will have a contribution of Rs.2 crore each from the Central and State Governments.

The project, seeking to address infrastructure issues in the 405-acre estate spread across the Inner Ring Road, will be implemented by the Guindy Infrastructure Upgradation Company, a special purpose vehicle.

Special purpose vehicle

While government units, located on 126 acres, will pay Rs.1.15 crore, the contribution by the private units, which own 128 acres, is Rs.1.17 crore.

The amount has been worked out at the rate of Rs.5,000 a ground. The common area is 151 acres.

The special purpose vehicle is expected to seek Rs.3.4 crores from financial institutions.

Leaders of the Industrial Estate Manufacturers Association say the interest evinced by the IT companies and the infrastructure upgrade is poised to change the face of the estate, originally conceived for engineering units.

Land prices go up

The programme and the decision of the IT firms have led to a rise in the land prices from Rs.12 lakh a ground about two years ago to Rs.50 lakh.

This provides a good exit option for owners of the sick units and will help entrepreneurs of other old units to get more working capital from the banks against the land.

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