Boom town Nagpur

A silent revolution is happening in the orange city. With its unique advantages, it is poised to emerge as a major investment destination.

NAGPUR: When Shashi Choudhary, 40, left his safe and cushy job as an academician a few years ago to start an IT firm in Nagpur, sceptics laughed. And everyone was a sceptic.

Choudhary persisted and doggedly kept at it. Today as the CEO of Lambent Technologies, one of the orange city’s most successful IT ventures that has been bought over by IT major Induslogic, he is having the last laugh.

His unique business model, with local manpower filling 80 per cent of the company’s jobs, is creating waves in the industry.

The best part about entrepreneurs like Choudhary is that Nagpur grew with them and their dreams. It took the same time for both to bloom and grab the attention of investors.

“We knew it wasn’t going to be easy, but we had no perception problem,” quips Choudhary. “Nagpur was not on the radar of IT. The elements were not in place. And we surely had no proven record,” he adds.

As Maharashtra’s second capital wakes up to an investment boom, Choudhary sits relaxed in his chamber, gauging the throbbing competition knocking on his doors. The city, he says, is coming of age, with fundamental parameters gaining health.

“The problems are getting eased up and investors and customers are confident of the city’s growth potential like never before,” he adds.

For instance, connectivity is no problem now; there are six Internet Service Providers (ISPs) today. Other elements are also in place - world-class education, infrastructure, better air connectivity with other leading cities and abundant manpower.

At a time when the leading five IT majors are on expansion mode, this could augur well for Nagpur. Industry watchers say the city’s USP is the availability of manpower. With 16 engineering colleges in the city and scores of others in the periphery of 300 km, each with close to 500 students, raw manpower is not a problem, says Choudhary, who home-bred a unique solution to train that manpower further.

“I roped in my own students, who were sharp,” he says. “Then, we began SETU, a project with 15 selected colleges and selected 3-5 students in their 2nd year; we are imparting training of 1000 hours to them. By the time they pass out, we get trained workforce from our own family,” he explains.

Industry watchers say a reverse brain drain will start in a couple of years. The experienced migrants will return when the IT majors set up shop here.

Nagpur is poised for the big leap. A recent Jones Lang LaSalle report puts the city along with Ahmedabad, Chandigarh, Indore and Kolkata as the best Tier III cities in India, positioned to emerge as major centres for offshoring activities by IT companies over the next five years. Already, some IT majors are queuing up.

IT is in
Satyam has signed an MoU with the Government of Maharashtra for a 118-acre plot in the proposed special economic zone in the multi-modal hub and airport at Nagpur (MIHAN). Several others like TCS are queuing up.

B Rama Raju, co-founder and managing director of Satyam says, “We’re delighted to be the first IT major to be in Nagpur and are confident of the potential of the city which has good infrastructure and a huge talent pool.”

Raju says Satyam is certain that with government support, it will be able to contribute in making Nagpur a great IT destination. The development is in line with its strategic decision to expand operations to tier III locations.

JP Rao, General Manager (design and build) of Shapoorji & Pallonji Co Ltd says, “Many of our clients have evinced interest and reserved the land in the IT park, but they are awaiting the take-off of the project.”

The Mumbai-based construction major, which is acquiring land to set up an IT park in the proposed SEZ, is also building the new international cricket ground for Vidarbha Cricket Association 20 km from the city off Wardha road.

Rao says Nagpur has a distinct advantage given its central geographical location, suitable socio-cultural and political condition, less commuting time, educational facilities, talent pool for the required workforce, growth potential, sustainability and comparatively cheap real estate prices.

“There is better air, road and rail connectivity now. So instead of Pune, which is saturating, Nagpur provides a better option. You are here in 50 minutes by air from Mumbai,” Rao says.

Building infrastructure
The Reward Real Estate, a company of the KSL group, is building a Rs450 crore Empress City in the heart of Nagpur on the land of now defunct Empress Mills around the Gandhi Sagar lake.

“It is the biggest project in terms of investment and size so far for Nagpur,” says Sourabh Tayal of Reward.

The Empress city will have a luxury hotel (to be managed by the Taj Group, it is learnt), a multiplex, a software park, luxury apartments and much more.

On August 29, the global aircraft manufacturing giant Boeing signed a MoU with the state government for setting up a Maintenance, Repair and Overhaul (MRO) facility at Nagpur, three months after it made a formal announcement, putting to rest all speculations. Boeing will be investing of $118 million.

“Nagpur presents many advantages to have a MRO facility,” says Dr Dinesh Keskar, Senior Vice President (sales, commercial airplanes) of Boeing. “The dry climatic conditions, central location and the availability of labour - both unskilled and skilled - weighed in favour of the orange city getting the MRO,” he adds. Boeing deal will draw more investments, industry watchers say.

Close on its heels, the domestic carrier Indian will set up a freighter hub that will envisage conversion of existing 737 aircraft into freighters in phases.

Participatory planning
Evidently, Nagpur boom may also mean some relief to Mumbai, already choc-a-bloc and bursting at the seams.

With Pune reaching a ‘saturation point’, the state government is keen to be able to offer Nagpur as an alternative to investors, particularly the blue-chip sector.

Chief Minister Vilasrao Deshmukh recently launched the ambitious Jawaharlal Nehru National Urban Renewal Mission (JNNURM) that will inject Rs5,000 crore in various projects over a period of seven years in the city. “The generation-next will surely grow up to see Nagpur developed into a model city,” Lokesh Chandra, the municipal commissioner, told DNA.

Chandra’s optimism is fuelled by the Urban Development Ministry’s open praise of the Nagpur Municipal Corporation (NMC) for its city development plan.

The ministry approved for its phase-I projects Rs187 crore. Nagpur left the other 63 cities under the mission way behind - in approach, planning, and vision.

“Our planning was participatory,” says Prakash Urade, coordinator of the plan. “We chose a different approach by deciding to concentrate on the basic needs of the city like water supply, sewerage disposal, traffic, green cover etc in the first phase. It has paid off.”

Chandra adds the JNNURM will accelerate public-private investments and lay a roadmap for the city’s overall transformation within seven years. The second phase will see mega-infrastructure and beautification projects coming up.

In sync with development is the growing air connectivity of the city.

The city airport, elevated to the international status last year, now has some domestic services and a couple of international flights.

Low cost carrier Air Deccan started its flights to Nagpur from Mumbai last year, while Air Sahara began its services from New Delhi and Hyderabad recently to tap the potential and cater to the ever-increasing demand.

Jet Airways and Indian were the only operators earlier.

Air Sahara President Alok Sharma said on the launch of its service on August 25, “We are looking at a very good load factor here. Nagpur is fast developing as a new hub right in the middle of India.

We are taking a long-term view of this city and intend to offer many new connections.”

Indeed. Excitement is in the long term.