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Bureaucratic hurdles force city IT firm to relocate to Chennai.

Date: 25-12-2015
Subject: Bureaucratic hurdles force city IT firm to relocate to Chennai
Visakhapatnam: At a time when the AP government is going all out to attract investments in the IT and electronics sector into the state, bureaucratic hurdles are forcing an existing IT firm to relocate to Chennai from the port city.

Sankhya Technologies, a research and development firm, which was one of the first to apply for setting up an office in Vizag way back in 2004, is now planning to relocate to Chennai by returning its land on IT Hill 2 to Andhra Pradesh Industrial Infrastructure Corporation (APIIC). Incidentally, Sankhya has received 4 US patents on its technologies and has several pending patents, as per their website.

Sources revealed that Sankhya Technologies had on December 21 sent an email 'Official notice of intent to disinvest in Visakhapatnam,' marked to the IT secretary, chief secretary and district collector among others. "Our management team have many takeaways from this misadventure in Visakhapatnam and I am confident that we will see greater success in our business plans almost from any other city in the world," the company has informed the state government in the email.

APIIC had initially sold the land to IT companies at around Rs 10 lakh per acre on IT Hill 2, but subsequently asked the allottees to convert the land holding from individual ownership to lease in order to avail incentives such as tax holiday. However, the allottees demanded denotification of the IT SEZ as banks were not funding expansion of IT units due to lease holding issues.

While a decision on denotification is yet to be taken, in the case of Sankhya Technologies, while Sankhya Technology India Operations received permission for operations, the parent company was yet to receive permission from the Visakhapatnam Special Economic Zone (VSEZ), which was affecting setting up of a full-fledged facility in the Vizag. According to sources, six other companies located on IT Hill 2 have been petitioning the government to denotify the land for more than two years now.

Speaking to TOI, CEO of Sankhya Technologies, Gopi Kumar Bulusu said, "The state government has not been able to make up its mind on the issue from 2008 onwards. We have made investments of around Rs 35-40 crore in terms of present value during the last 10 years, but the issue of land is not being sorted out."

He said, "We don't want to do this but we are only left with two options professionally. One is to file a case of cheating on APIIC and IT department and file appeal at VSEZ deputy commissioner against their flawed order. The other option is to return the property to APIIC and move forward with our business plans and if that takes us out of Vizag to follow business principles. We will wait for any advice from the state government before taking a decision."

"We came to Vizag from Chennai as we thought it was suitable for R&D, but now we are seriously considering moving back to Chennai and focusing on our business," Bulusu said adding that Sankhya Technologies is among only five companies in India operating on the IT technology platforms.

Source : timesofindia.indiatimes.com

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