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Pink Mahindra City

Vinay Kamath | Updated on December 06, 2013

Mahindra world city, Jaipur   -  Supplied Pic

“New rules are enabling SEZs with a smarter product mix.” SANGEETA PRASAD, CEO, Integrated Cities and Business Clusters, M&M   -  The Hindu

After Chennai, M&M’s integrated business city in Jaipur is buzzing with a facility that’s twice as large.

When Brazilian ATM maker Perto decided to set up a manufacturing facility in India, Roberto Baur, its Director and India Head, arrived to scout for a location. The lanky Brazilian zeroed in on picturesque Jaipur and the Mahindra World City for the Rs 250-crore project. Baur says he liked what he saw: ready land to set up a factory in a secure zone, a developer who will take care of maintenance and housekeeping, plug-and-play infrastructure, apart from the fact that living in Jaipur would be good for him and his family, especially as he has to travel incessantly.

While the Perto project does not get any of the special economic zone (SEZ) benefits the Central government offers, as it is in the domestic tariff area of the integrated business city, it has however got a customised incentive package from the State government which includes multiple waivers and discounts on State-level taxes. That clinched the deal for the Brazilian company, which at peak level will churn out 1,000 cash-dispensing machines a month and about 400 access control systems.

Perto is one of several MNCs that have plumped for M&M group’s Mahindra World Cities, first set up in Chennai as an integrated business city early last decade and in Jaipur from 2006. While the Chennai MWC, spread over 1,550 acres and over 30 km from the city, was a brave experiment in urban development with a motto of work-live-play, the initial years weren’t a cakewalk.

Arun Nanda, Chairman of the promoting company Mahindra Lifespaces, had in an earlier interview recalled the trials and tribulations the project went through till IT major Infosys decided in 2004 to set up campus there, taking up 129 acres. That, in some sense, opened the floodgates for investment; today MWC Chennai hums with 62 companies, including top-notch MNCs such as BMW, Timken and Husky. Current investment in MWC Chennai stands at Rs 3,300 crore and last year’s exports stood at Rs 6,109 crore.

This year, by September, exports had already crossed the Rs 3,600-crore mark and were expected to go beyond Rs 7,000 crore by the end of this fiscal. About 33,000 people are directly employed. Encouraged by the success in Chennai, the group gravitated towards the northwest, to Jaipur, for a similar integrated business city at twice the size — 3,000 acres. Mahindra Lifespaces is today the only corporate to have multiple SEZs in different cities.

Sangeeta Prasad, CEO of the Integrated Cities and Business Clusters business, says that “recent changes in government rules regarding the amount of land one needs for a multi-product SEZ are enabling SEZ developers like us to look at a smarter product mix”. Right now, product-specific SEZs are part of MWC, Jaipur — information technology/IT-enabled services; engineering and related industries; handicrafts; gems and jewellery. But unlike in Chennai, where it leased out land for companies to construct their campuses, in Jaipur it has additionally constructed a large IT park called ‘eVolve’. The tenants include IT/ITeS and BFSI (banking, financial service and insurance) companies; Deutsche Bank, Genpact and Metlife are among the major ones. “It’s an alternative revenue earner for us as it’s a continuous stream,” she points out. Till March 2013, companies have collectively invested Rs 1,322 crore in MWC Jaipur, with exports touching Rs 656 crore. The developer’s revenue comes from parcelling out land, renting out IT built-up spaces, and from maintenance and housekeeping service.

Early last decade, Infosys was invited to set up a campus in Rajasthan, but the IT major first wanted MWC to replicate its Chennai offering in the desert State. And like in the Chennai City, Infy was the first tenant in Jaipur too, buying 200 acres for its BPO and software development operations. Says Somesh Gupta, the DC Head of Infosys in Jaipur, “We wanted to tap into the talent in this part of the country and Jaipur has emerged as a good hub for BFSI operations.” A study shows that Rajasthan churns out 36 per cent of the country’s chartered and cost accountants as well as company secretaries, and it’s this talent pool that has caught the eye of companies such as Infy.

Sanjay Srivastava, COO of the Jaipur MWC, says, “The State has abundant skilled manpower, yet untapped, given a fairly large educational base. As corporates are only now discovering the potential, HR costs are relatively on the lower side.” Infy already has 1,800 employees and can hire up to 3,300, even as it expects to expand and employ 4,000 in the next few years, says S.M. Bharadwaj, regional manager for infrastructure. “We’re preparing Jaipur to be a large development centre; the next two to three years will see the city emerge as a major IT hub,” he says. The software major will invest Rs 250 crore to add another four lakh sq ft to the three lakh it now has at MWC.

Sangeeta Prasad says that MWC Jaipur has substantially built on the learning from its Chennai counterpart. For one, it is twice as large. In Chennai, owing to the distance from the city, MWC had to necessarily go in for a residential zone, putting up a school, apartment complexes, villas and suchlike once industries started coming in. Soon a hotel will start functioning and so will a small hospital.

But Jaipur is an established tourism destination, and the MWC is fairly close to the city centre. “In Chennai we had no choice but to create all infrastructure, as the city is bursting at the seams. Our Chennai city reflects our philosophy of livelihood, living and life where living is the homes we build and the latter constitutes the softer things of community building. However, in Jaipur my ‘living’ product may not be only residential. We are looking at other elements. Given that Jaipur is already a tourism destination, we can look at entertainment or tourism in some form later,” explains Prasad.

Published on December 05, 2013

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