Delay by the State government in addressing infrastructure bottlenecks on the Outer Ring Road (ORR) and in Whitefield is forcing several IT and ITES companies to shelve their expansion plans here owing to huge productivity loss.
The companies are looking at Hyderabad, Pune and Navi Mumbai, besides keeping their options to go for expansions in China. According to an estimate by the ORR Companies Association (ORRCA), they lose Rs 22,770 crore or $3.45 billion a year. The direct employment in these companies is around four lakh, including 2.5 lakh in companies on ORR and 1.5 lakh in Whitefield. Before breaking for Christmas holidays, ORRCA representatives met Principal Secretary (IT) V Manjula and placed their concerns before her. They are yet to hear from the government.“Everyone is facing a serious threat as employees spend four to five hours commuting to workplace,’’ says Vinod Chandra, Vice President and General Manager, Brocade India.
Brocade India is looking at Navi Mumbai and has already shelved its expansion plans here. “Travel time there is less and there is a good public transport,’’ he cited as reasons for shifting. Almost every company on the ORR has shelved expansion plans, he added. Sarv Sarvanan, Managing Director, EMC Corporation India, admitted that productivity issues are becoming visible globally. “Bengaluru is no more local. We are getting customers and visitors from all over the world. They all know how much time it takes to cover 1 km here,’’ he pointed out.
“When we mention expansion, it is being questioned. They ask what the government is doing? Is it going to address the problems in real time?” Sarvanan explained, saying it was a challenge to get expansion approvals.
EMC is looking at Hyderabad, Pune and even at China if things don’t improve. “We are all suffering from productivity loss. It becomes a battle and requires more effort to convince higher ups,’’ said Ram Narayanan, General Manager, eBay Product Development Centre.
Company honchos said if the government fails to create a better business climate in the next six months, we have to look elsewhere, they said.