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Infra boost spurs Pune’s IT fortunes

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A series of planned and ongoing infrastructure improvements have provided a fillip to Pune’s growing reputation as a preferred destination for IT and ITeS players, writes Prachi Bari.

Pune first emerged on the country’s IT map back in 2002 when a handful of IT companies set up base there. Buoyed by the city’s strategic location, abundant talent pool, easy availability of land at competitive prices and basic infrastructure facilities it wasn’t long before this trickle turned into a flood transforming the city to its present status as a preferred IT & ITeS destination.

Subsequent investments into infrastructure development designed to boost the IT presence in the city have also paid off handsomely. A case in point is the Rajiv Gandhi Infotech Infotech Park at Hinjewadi, one of the first IT-specific parks in the city that today boasts of the presence of some of the top IT and ITeS companies in the country.

According to some of the city’s leading developers, better infrastructure facilities, a large pool of educated and skilled professionals and an inherent cost advantage when compared to larger metros like Mumbai, are some of the reasons that have encouraged reputed software giants like Infosys, Satyam, Tata Technologies, TCS, Kanbay, Veritas, Cognizant, PCS, and Mahindra British Telecom to set up base at emerging IT hubs in the city like Hinjewadi, Nagar road, Kharadi, Baner road and Bavdhan among others. A trend, that has also created an estimated 70,000 employment opportunities for the city’s denizens.

“Lower costs and wider options are two of the key advantages that this city offers players looking for commercial space,” says Sunil Kolte, director, Kolte-Patil Developers that has a slew of completed and ongoing projects targeting the IT sector in the city.             

“Leasing commercial space at Pune comes at a fraction of the cost for a comparable property at Mumbai,” he adds. “Even when compared to other cities like Hyderabad and Bengaluru, the price for commercial space at most of the city’s well-equipped IT parks is very competitive.”

On the residential front, the increasing number of IT professionals shifting base to Pune is already having a positive impact on the city’s lease market for residential accommodation. As per the findings of a recent survey approximately 37,000 flats have been rented out to mostly IT professionals at Hinjewadi alone at a time when property prices in the city are down by anywhere between 20-40% as per the estimates of the Promoters and Builders’Association of Pune (PBAP).  

Key players like Satish Magar, CMD, Magarpatta Township Development and president, PBAP attribute this to a fear psychosis fuelled by the prevailing employment insecurities but are optimistic about the future. He says, “Though the IT community has adopted a wait and watch approach with regard to their property buying decisions we are bullish about the future since the city’s IT sector is still growing at a rate of 10-15% year-on-year.”

“Given the economic turmoil over the last few months, Pune today is viewed as the perfect venue by many companies to increase operational efficiencies and reduce infrastructural costs,” says KP Baney, MD, Devi Constructions. “Moreover the scope for price negotiation offered by emerging realty destinations like Pune, Hyderabad and Kolkata is a lot higher than matured markets like Mumbai and Delhi. This in turn has translated into a significant cost benefit for companies looking at cutting property costs without compromising on basic facilities.”

According to industry experts, the city’s existing infrastructure facilities have been boosted to a great extent by several key initiatives in recent years. These include the launch of the Pune-Mumbai expressway that has cut down travel time to within four hours, improvements in the rail network that now connect Pune with several cities pan-India and other inter-city developments works that include building better roads and improved telecom infrastructure.

“Pune today has almost 28 flights operating from its airport on a daily basis,” adds Mohammad Aslam, regional head, Jones Lang LaSalle Meghraj (JLLM). “This figure is set to go up even further once the new international airport at Chakan, north of Pune becomes fully operational by 2016.”

A slew of new initiatives that include a ring road and metro rail system, are also expected to provide a fillip to Pune’s infra capabilities. “The development of a new 90 meter wide ring road covering a distance of approximately 140 kms is likely to ease the city’s commuting problems to a large extent,” explains Aslam.

“Furthermore the city will also have a network of 15 flyovers over arterials roads under the JNURM programme. Initial surveys have also commenced for the Pune Metro system, a new mass transit system that is likely to be operational by 2012,” he adds.   

According to Aslam, the state’s comfortable power generation capacity which is in excess of 14,000 MW and a provision for a 100% back up feeder supply for specially designated IT hubs like Hinjewadi, Kharadi and Talawade have also played a major role in boosting the confidence of IT majors setting up operations here.

“In addition to this, Pune is also currently witnessing a lot of quality commercial development coming up in terms of SEZs. This excess supply is likely to lead to lower rentals for IT players looking at leasing prime commercial space in the city.”

Not surprisingly then, IT experts like Ganesh Natarajan, vice chairman & MD, Zensar Technologies are quick to endorse Pune’s growing reputation as a preferred destination for the IT sector though a few concerns remain.

He says, “Pune is still the best IT destination in the country given its ample availability of skilled manpower, salubrious climate and easy connectivity to Mumbai and Delhi. Infrastructure has also improved considerably but a lot more needs to be done like decongesting the traffic on its roads by providing better mass transport services.”

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