it investment region presentation

IT Investment Region (ITIR) in

Punjab

December 2010

Conceptual Framework & Assessment

I IeQ

Our Global Capabilities in Nuclear Energy2

AgendaSection1 Our Understanding & Progress So Far

2 IT/ITeS Industry Overview

3 ITIR Policy

4 Benchmarking

5 ITIR Demand Assessment in Punjab

6 Site Delineation

7 Concept Plan

8 Management Structure

9 Way Forward

Our UnderstandingSection 1

3

AgendaSection

1 Our Understanding & Progress So Far

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ITIR in PunjabProgress So Far…

Progress so far

Inception Report

Conceptual Framework

& Assessment

Masterplan

Viability Analysis

DraftFinal report

1

2

3

4

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IT/ITeS Industry OverviewSection 2

AgendaSection

2 IT/ITeS Industry Overview

Industry Structure

Hardware Industry

IT Services and Software Industry

Competitive Advantages of Punjab

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Industry StructureGlobal IT/ITeS Industry

Hardware: 26 %

Market Size: 365 USD bilGrowth Rate: 9% (FY 08-09)

Software: 17 %


IT Services & BPO: 57 %


- IT Services occupies largest market share in the global IT/ITeS market

- Hardware has the highest CAGR in this decade (about 30%) and has also witnessed fastest

resurgence post the global economic meltdown

Source: NASSCOM report on Indian IT Industry, 2009

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Hardware IndustryGlobal Overview and India’s Position

India’s Position in Global Market

0.4% 1.0%

Despite a marginal increase in global hardware

production (2003-08; CAGR 1%); India has

witnessed an unprecedented boom in the sector

-Share in global production increased from

0.4% to 1% (‘03-08)

-CAGR: 20% (‘03-08)

2003 2008

Source: Electronics Corporation of India

CAGR (‘03-08): 1%CAGR (‘03-07): 12%

GlobalIndia

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Hardware IndustryIndia Overview and Punjab’s Position

Punjab’s Position in Indian Market Despite an overall growth in the sector, Punjab’s

contribution to national hardware production has

dropped significantly (1.7% to 0.7%)

This decline in share of national market is primarily

owing to higher growth in other states including

Maharashtra & Karnataka

1.7% 0.7%

Consumer Electronics: 22.5 INR cr (10%)

Industrial Electronics: 11.9 INR cr (17%)

Computers: 16.4 INR cr (31%)

Communication Equip: 14.3 INR cr (24%)

Strategic Electronics: 6.1 INR cr (20%)

Components: 9.5 INR cr (8%)

Structure of Indian Hardware Industry (Market Size in INR cr, (CAGR 2003-08)

2003 2008

Source: Electronics Corporation of India IndiaPunjab

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Hardware IndustryFuture Outlook

Source: Electronics Corporation of India

22%

11%

- Post the very high growth period in the hardware/electronics sector (2004-10), growth is expected to

be stabilized at a CAGR of 11% (2009-15).

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India’s Position in Global Market

Software & ITeS IndustryGlobal Overview and India’s Position

4%6%

- Despite the slowdown in this sector due to

global economic meltdown in 2008, the

industry is now back on a path of resurgence.

India’s contribution to global industry has

grown marginally from 4% to 6%

2006 2009

Source: NASSCOM report on Indian IT industry, 2009

-4 %

-0.1 %

GlobalIndia

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Software & ITeS IndustryIndia Overview and Punjab’s Position

CAGR (’04-08)22%

Punjab’s Position in National Market - Despite an impressive growth in the industry

at a national level (CAGR: 22%), Punjab has

not been able to leverage upon this growth.

Its share in national market has declined from

1% to 0.5%1% 0.5%

2004 2008

Source: NASSCOM report on Indian IT industry, 2009 IndiaPunjab

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Software & ITeS IndustryFuture Outlook

- Punjab is expected to gather pace in the IT/ITeS segment over the next two decades. Government

estimates an employment of 0.24 mil and 0.57 mil by 2020 & 2030 respectively.

CAGR (’10-30)17%

Source: Punjab Infotech; IT/ITeS Strategy for the State

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Competitive Advantages of PunjabAvailability of Skilled Human Resources

- Punjab has a marginal share in the national IT workforce (about 2%) compared to leading States like

Karnataka (10%) and Andhra Pradesh (9%)

- Though Punjab has a sizeable IT resource pool in the form of 21,500 IT professionals every year;

only 50% of these graduates are from accredited degree courses.

- Punjab needs to focus on quality higher/technical education to be able to attract global IT giants

IT graduates in India ‘09 IT graduates in Punjab ‘09

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Competitive Advantages of PunjabIT/ITeS Policy Attractiveness

Source: Data compiled from IT Policies of respective State Governments

AP Kar Pun Guj HarPower Exemption from

statutory cutsExemption from statutory cuts

Duty exemption for 5 yrs

Duty exemption for 5 yrs

Exemption from statutory cuts

Stamp Duty / Registration

100% reimbursement

N.A 100% exemption 100% exemption N.A

Entry Tax N.A Exempted N.A N.A N.A

FSI No restriction 50% relaxation FSI of 3.0 May allow 100% relaxation

Policy Focus Attracting investments to Tier-II cities

Attracting large IT related developments

Use IT as engine for economic growth

Integrated facilitiesFocus of higher value-added activities

To transform Haryana into an IT driven economy by maximum facilitation

Attractiveness High Medium Medium High Medium

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Competitive Advantages of PunjabPunjab vis-à-vis Other Key IT States

- Mohali fairs better than other emerging and established locations in terms of general cost of living

and real estate costs

Source: Based on data compiled from CII Institute of Competitiveness

Mohali ranks 3rd

Mohali ranks 2nd

Mohali ranks 2nd

Mohali ranks 5th

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ITIR PolicySection 3

AgendaSection

3 ITIR Policy

Salient features of the policy

Developments so far

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ITIR Policy Salient Features of the Policy

Feature Provision

Area Minimum 40 sq.km. Minimum 40% Processing Area which may or may not be contiguous May be a Greenfield or Brownfield development

Types of Activity Permissible within Processing Area

IT/ITeS Electronic hardware manufacturing units Related logistics facilities

Phasing Norms Phase I to not exceed 20% of the total area Suggested timeline for development: 15-20 yrs

Proposed Management Structure

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Chennai (planning stage)•40 sq.km. – Tiruvallur

Bhubaneshwar (Applied)•40 sq.km. – Jatni- Khurda •2.3 lakh direct employment

ITIR Policy Development So Far

Bangalore (Approved)•42.5 sq.km. – Devanhalli•2.5 lakh direct employment•55 companies have proposed to invest over Rs.12,353 cr

Hyderabad (Applied)•202 sq.km. – Shamshabad & Gachhibowli•15 lakh direct employment

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BenchmarkingSection 4

AgendaSection

4 Benchmarking

Case Studies

Key Development Parameters for ITIR

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BenchmarkingDevelopment Scale and Concept

ITIR in BangaloreKarnataka (India)

CyberjayaSepang (Malaysia)

AREA: 42.5 sq.km.

CLOSEST CITY CENTER: Bangalore , 30 kmsAREA: 28.32 sq.km.

CLOSEST CITY CENTER: Kuala Lumpur, 50kms

Site Scale of Punjab ITIR Primate City

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BenchmarkingLand Use Distribution

ITIR in BangaloreKarnataka (India)

CyberjayaSepang (Malaysia)

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ITIR Demand in PunjabSection 5

AgendaSection

5 ITIR Demand in Punjab

Broad Projections – Hardware Industry

Broad Projections – ITeS & Software Industry

Existing/Upcoming IT Developments in the State and Future Demand

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IT/ITes Industry in PunjabKey Developments within Punjab

SAS Nagar

Existing Proposed

IT Park SanetaSukhmanai Towers IT SEZA Tech IT CitySukhram Infrastructure IT SEZLark Project IT SEZKnowledge City Shipra Estate Ltd.Yellow Stone Landmark Infocity IT BaranSundran IT Park

Tech Know ParkIT Park Ropar

GIKC Rajpura

IT Park , Kapurthala

IT Park – Sec 67ELTOPQuark CITY

- About 85% of existing & proposed IT developments in Punjab are concentrated in & around GMADA

- Focus of ITIR would be consolidate the existing and upcoming IT developments in Punjab

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Key Assumptions

Sector Employment density

ITes & Software 15 sq.m. per employee

Hardware 150 employees per hectare

Support Logistics 120 employees per hectare

Other Key Factors

Annual output per employee (USD) - (Hardware and electronic) 73,000

Projected Market Size of Indian Hardware Industry (2015) INR 790,000 crores

Projected ITeS employment in Punjab as a% of India’s IT employment (2020) 1.1%

Demand Estimation for ITIR in PunjabKey Assumptions

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Demand Estimation for ITIR in PunjabITeS and Software

15 sq.m. per employee

* Punjab Infotech; IT/ITeS Strategy for the State

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Demand Estimation for ITIR in PunjabHardware

150 workers per hectare

* Electronics Corporation of India

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Demand Estimation for ITIR in PunjabIT/ITeS Space Demand in Punjab

Component Total Demand (ac)

ITeS and Software Industry 705

Hardware Industry 2,318

Support Logistics * 232

TOTAL IT/ITeS + Logistics 3,256

Support social amenities and utilities 2,664

TOTAL IT/ITeS based area required in the State 5,920

- Additional Demand4,038 ac=Total Demand

5,920 ac

- Total additional IT space demand in the State by 2030 is 4,038 ac

*As per industry standards Logistics = 10% of manufacturing space

I* Includes logistics = 10% of manufacturing space

Demand Estimation for ITIR in PunjabRequirements of an ITIR

Total area for ITIR = 40 sq.km. (9,885 ac) PA requirement = 40% of total area= 3954 ac

- As per the ITIR policy, min. 40% of an ITIR area should be the Processing Area (~4,000 ac)

- In line with other similar developments, IT/ITeS/Logistics space typically constitutes 55% of the total P.A

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IT/ITes Industry in PunjabKey Developments within Mohali Cluster

2

13

1

2

34

5

68

79

# ProjectTotal Area

(ac)PA (ac)

Absorption

Existing

1 IT Park 15 12 46%

2 ELTOP & Phase VIII 365 328 98%

3 Quark City 51 25 20%

Proposed

1 IT Park Saneta 44 26 Land acquisition under process

2 IT SEZ‐ Sukhmanai Towers 36 18 Formal approval

3 A Tech IT City 147 73.5 Formal approval

4IT SEZ ‐ Sukhram Infrastructure

43 21.5 Formal approval

5 IT SEZ ‐ Lark Project 31 15.5 Formal approval

6 Knowledge City 1500 600 381 acre land acquired.

7 Shipra Estate Ltd. 50 25 In‐principle approval

8Yellow Stone Landmark Infocity

220 110 Land acquired, infra dev started

9 Sundran IT Park 462 277Land acquired , internal dev to start

Existing Proposed

- Based on the future demand

and existing concentration of IT

developments, it is

recommended that proposed

ITIR be located within GMADA

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IT/ITes Industry in PunjabFeasibility of Proposed ITIR

Punjab

ITIR

Existing IT space

366 ac

Proposed IT space

1,516 ac

Additional demand

4,038 ac

Existing IT space

366 ac

Proposed IT space

710 ac

Additional demand(65% of the total additional demand

in the State)

2,925 ac

- ITIR in Punjab, is proposed as:

- Brownfield development within GMADA region

- Including 1075 ac of ex/pr IT developments in the region

Total

5,920 ac

Total

4,000 ac

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Site DelineationSection 6

AgendaSection

6 Site Delineation

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SAS Nagar is identified as the Study Area for the proposed ITIR

SAS Nagar has emerged as an IT/ITeS nerve centre

It is promoting the growth of IT industry and compatible infrastructure

This IT hub in the State is becoming an increasingly preferred IT destination with greater investments in physical, research & innovation infrastructure.

IT/ITeS

SAS Nagar… An emerging IT/ITeS nerve centre

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Potential Study Area Location

SAS Nagar district includes Mohali which is also part of Tricity along with Panchkula (Haryana) and Chandigarh (UT)

Due to increasing IT Activity in Tricity region, area along it is chosen as a broad study area for ITIR

The study area includes Mohali, Mullanpur, Zirakpur Derabassi and Banur

SirhindTo Ludhiana

Rajpura(GIKC 1400 acres)

PR 9

To Patiala

Banur

Morinda

To Delhi

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ITIRSAS Nagar… The Study Area

PR 9

To Patiala

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Existing and proposed Road Network

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Existing and proposed Metro and railway network

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MMTH

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Air port influence zone

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IPage 40

Water supply Network

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IPage 40

SOURCES OF WATER SUPPLY

Existing sources• Bore well – Pre-monsoon bgl

4.1m- 13.2m• Canal water – Bhakra main

Possible Sources• Sutluj Yamuna Link Canal• Janta devi ki Rao and Patiala

rao (seasonal rivulets)• Trunk infrastructure extension

from Mohali

Water supply Network

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Power Supply Network

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IPage 42

Power Supply Network

SOURCES OF POWER SUPPLY

Existing sources• Guru Gobind SSTP of 1260 MW

at Ropar• 400kV transmission line along

Kharar Banur Road• 220kV transmission line

connecting Mohali and Rajpura.

Possible Sources• 1320 MW Thermal power plant

at Rajpura• 1000 MW cycle gas based

thermal power plant at Ropar.

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Concept PlanSection 7

AgendaSection

7 Concept Plan

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ITIRPotential Zone in the Study Area

Why? Strategically located adjoining

Kharar, Mullanpur, Mohali and Chandigarh Extension

Served by existing NHs, proposed GMADA expressway ring road and urban arterials extending from Mohali and Chandigarh

Kharar-Banur Road to emerge as IT and real estate development zone

Connectivity to key nodes of Ambala, Mohali, Chandigarh and other surrounding areas

Potential to act as a major economic hub for the future development goals of these cities

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Potential ITIR Site DelineationConnectivity attribute for the Preferred site

SITE SELECTION CRITERIA• Proximity to urban centers• Access to infrastructure• Proximity to international Airport• Proximity to logistic hubs• Availability of skilled manpower• Land availability and cost

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Reconfiguration of preferred site with inclusion of existing and proposed IT activity

Potential ITIR Site Delineation

Page 46

SITE SELECTION CRITERIA• Emerging IT / ITeS capacity and

potential

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Social Infrastructure attribute of Preferred ITIR Site

Potential ITIR Site Delineation

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Physical ITIR Site Delineation

Land-use break-up of proposed GMADA Master Plan 2031 within proposed ITIR Site

Land use in proposed ITIR Area

% of Land allocated

Mixed use 1+2 0.1%

Commercial 4.7%

Wholesale centre 1.1%

Industry Technology and R&D 2.8%

Industry and Warehouse 22.6%

Institution and public buildings 11.8%

Residential 38.5%

Green 6.8%

Roads 7.5%

Villages 4.1%

Total Area 100.00%

Existing land use area break up of GMADA Master plan within proposed ITIR site

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Land Use Area in %

Area available for development 66.4

Area under village settlements 9.5

Area under other land uses 18.9

Grasslands and orchards 3.9

Area under Water bodies 1.4

Physical ITIR Site DelineationExisting physical features and the existing

and proposed infrastructure linkages

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Proposed DevelopmentSWOT Analysis

Proximity to Mohali as a well known destination globally giving a sense of comfort to the investors.

Proximity to existing IT/ITeS industrial clusters in Mohali facilitated by existing residential and commercial clusters

Good regional connectivity via existing National and State Highway infrastructure

Proximity to the proposed International Airport at Chandigarh.

Potential for availability of power and water infrastructure around the proposed development

Strengths Weaknesses

Limited international standard technical institutes and knowledge centers in the area, however there are proposals of the upcoming knowledge cities and research institutes that are envisioned to enhance the skilled labor quality in the region.

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Proposed DevelopmentSWOT Analysis

The Investment Region development to reinforce the exisiting and growing IT/ITeS industrial base in the Greater Mohali Region

A global IT hub, and a model of sustainable development with world class infrastructure.

The proposed physical and social infrastructure comprising of Knowledge City and an International Airport at Chandigarh, Multi Modal Transport Hub at Mohali together with a Metro rail and BRT project improving connectivity in Chandigarh Tricity region is likely to attract IT/ITeS investors and boost growth of the IT/ITeS sector.

Opportunities Threats

Numerous villages pose a challenge to a successful retention and integration with the model industrial city development.

The region falls in the earthquake high damage risk zone IV and a limited area is prone to flooding..

Competition from other IT/ITeS, Knowledge city developments outside ITIR.

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ITIR Area distribution Area (ac) Area (sq.km.) % of total

Processing Area 4050 16.4 40%

Non-processing Area 6040 24.4 60%

Total Area 10090 40.8 100%

Processing and non-processing areas within proposed ITIR Site

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Existing and proposed IT activity in the processing zone of the ITIR

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ITIR Area distribution Area (ac) Area (sq.km.) % of total

Processing Area 4050 16.4 40%

Non-processing Area 6040 24.4 60%

Total Area 10090 40.8 100%

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# Project Location Total Area (ac) Processing Area (ac) Absorption

1 IT Park Sector 67 Mohali 15 12 46%

2 ELTOP & Phase VIII Phase VIII, Mohali 365 328.5 98%

3 Quark City Sector 75 & 74, Mohali 51 25.5 20%

TOTAL 431 366

# Project Location Total Area (ac) Processing Area (ac) Status

1 IT Park Saneta, Mohali 44 26.4 Land acquisition under process

2 Lark Project Pvt. Ltd. (Formally Approved SEZ) Landran Mohali 31 15.5 Formal approval

3 Knowledge City Mohali 1500 600 381 acre land aquired.

4 Yellow Stone Landmark Infocity Sector 66A, Mohali 220 110 Land aquired, infra dev

started

TOTAL 1795 751.9

Existing IT/ITeS projects within proposed ITIR site

Proposed IT/ITeS projects within proposed ITIR site

Existing and proposed IT activity in the processing zone of ITIR

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Residential and social infrastructure activity in the non-processing zone of the ITIR

# Projects Location No of units.

1 Mohali Hills Sector 105, 108, 109, Mohali 1120

2 Pearl Residency Sector 107, Mohali 175

3 Ireo Rise Sector 99, Mohali 450

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Existing and proposed development in the processing and non-processing zone of the ITIR

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Influence zones within processing / non-processing area

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Activity Mix in the Proposed ITIR

Land use distribution within ITIR site as per GMADA Master Plan2031 in

AcresLand use % of Proposed ITIR

Industrial 2225 22%

Residential 3732 37%

Commercial 416 4%

Social Infrastructure 808 8%

Utilities405 4%

Roads 1816 18%

Greens 688 7%

TOTAL 10090 100%

As per GMADA Master Plan 2031 residential land use may also include social infrastructure, utilities, green open spaces and small commercial pockets

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Segment% of total area

Area (ac) FSI GFA

(sq.m.) Workers/ha Employment Captive Pop

Total Industrial 2200 11,018,179 585,025 2,340,099

ITeS & Software 22% 477 3 5,787,821 2400

482,318 1,929,274

Hardware 71% 1567 1 4,754,871 150 95,098 380,394

Support Logistics 7% 157 1 475,487 120 7,608 30,432

ITIR in Punjab is expected to generate an employment of about 585,000 and a captive population of about 2.3 million

Gross res den (pph)

With % of captive population

100% 50% 25% 15%

Recommended (UDPFI) 300

Residential area required (ha) 7800 3900 1950 1170

Residential area required (sq.km.) 78 39 20 12

% of total ITIR area 195% 98% 49% 29%

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Land use FAR as per GMADA MP 2031Recommende

d FAR

Industry/ Business Park

Industry & Warehouse use 1.0 0.75

Business parks & IT Parks 2.0 3.0

Institutions 1.0 1.5

Residential

Detached dwellings 1.65 1.65

Group Housing 1.75 2.0

Mega Residential Townships AS PER PUDA 2.0

Mixed Use

Mixed use 1 2.5 2.5

Mixed use 2 2.5 3.0

Development parameters: covered area, height restrictions, FAR

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‘Airport Funnel’ height restrictions• Chandigarh Airport is abutting ITIR

site and hence some part of the site will have building height restrictions due to aviation norms.

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Development along Urban Arterials• Majority of IT/ITes activity and commercial as

well as mixed use will be aligned to urban arterials.

• With FAR ranging from 2.5 to 3 urban arterials will have high-rise high density development

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Town Centres• Sector 87 is identified as a Town

centre / CBD in GMADA Master plan.

• This area is expected to have mix of activities related to social infrastructure such as recreational, leisure and retail areas along with commercial and residential buildings

• FAR 2.5 to 3

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Knowledge and research Clusters• Key central component of the project • Conceptually acts a gateway Provides a brand identity to the development • Medium density – medium rise – 5 floors• Signature buildings – 7/8 floors• FAR 1.5 – 2.5

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IT/ITeS Clusters• Corporate business park / commercial office environment provides a brand identity to

the development • Higher employment density and higher development density • Mid rise 5-10 stories or higher depending on demand• A high quality outdoor environment that constitutes mixed use development, areas for

passive and active recreation, multi-modal transportation system opportunities and international street design standards

• FAR upto 3

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Management StructureSection 8

AgendaSection

8 Management Structure

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ITIR in PunjabManagement Structure – Institutional framework

Pre approval stage►State Government - to identify a suitable site (preferably non-agricultural land), prepare the proposal and seek

approval as per prescribed procedure

►Department of Information Technology (DIT) - nodal department of the Government of India for the ITIR.

►Nodal department of State Government (herein Punjab Infotech) - responsible to facilitate all clearances required from

the State Government.

►The state government / developer would also provide social infrastructure such as residential, education, health, local

commercial, recreational, socio-cultural and entertainment facilities

Department of Information Technology

(DIT)

Recommendations of HPC & Note on proposed ITIR

High Powered Committee

(HPC)State

Government

Cabinet Committee on

Economic Affairs (CCEA)

Approval on ITIRNotification of ITIR

Application + Project

proposal for approval of

ITIR

Verification of Application

for approval of ITIR + Project

proposal

Approval process of ITIR

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Post approval stage

►State Level Empowered Committee (ITIR-SLEC):

► Supervisory board

►Will constitute of political members such as Cabinet ministers, concerned area MLAs, MPs and others.

►Apex authority headed by the Chief Minister with state level cabinet ministers

► Responsible for the overall monitoring of the SLEC.

►Management board to be set up by the State Government

►Shall prepare a detailed Master plan

►Grant approvals to the proposals for setting up units in the ITIR

►Project specific Special Purpose Vehicles (SPVs)

► Implement individual project components viz. Industrial Areas/SEZs, Roads, Power, Ports, Airports etc

►Central Government

►Facilitate setting up of higher educational & research facilities such as IIIT with the assistance of MHRD

►Once the ITIR attains the threshold population, a separate Urban local body (ULB) may be constituted, if necessary.

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State Government State level Empowered Committee (SLEC)

Management BoardState-level Coordination Entity/ Nodal Agency

Project Specific Special Purpose Vehicle (SPV)

(For Projects viz. Ports, Airports, Roads, Industrial Areas, Power etc)


Management structure of ITIR

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Way ForwardSection 7

AgendaSection

9 Way Forward

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IT/ITes Industry in PunjabWay Forward

Inception Report

Conceptual Framework

& Assessment

Masterplan

Viability Analysis

DraftFinal report

1

2

3

4

5

2 months from

approval of Conceptual Framework

it investment region presentation

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