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States vie to bag Rs 1 billion business school

The governments of Andhra Pradesh and Karnataka, led by N Chandrababu Naidu and J H Patel, are slugging it out to woo the creme de la creme of Indian corporates, in their separate bids to get the industry-sponsored business school project located in their state.

The project's significance stems from the fact that the Ambanis of the Reliance group have an understanding with the renowned Wharton School and Kellogs School of Management to start a corporate-sponsored business school in India. The proposed Indian School of Business is tipped to outperform the existing six Indian Institutes of Management in Ahmedabad, Bangalore, Calcutta, Lucknow, Korighat and Indore.

ISB was originally planned to be set up in Bombay, but was stalled when the state government demanded that at least ten per cent of the seats be reserved for Maharashtrians.

The AP-Karnataka race has since got steamier as some of the leading industrialists, who are keen on promoting the prestigious Rs 1 billion venture, have begun eyeing two more states, Maharashtra and Tamil Nadu for a close look. Meanwhile, West Bengal too has expressed an inclination to do everything to get the school located near Calcutta.

On August 2 morning, a team of industrialists -- Anil Ambani of Reliance, Y C Deveshwar of ITC, Keki Dadiseth of Hindustan Lever, Adi Godrej of Godrej group, Anand Mahendra of Mahindra and Mahindra, K V Kamat of ICICI, Rajat Gupta of McKinsey & Co, Deepak Parekh of HDFC and Anil Kumar of Soros-Chatterjee Group -- took off from Bombay for a whistle-stop tour punctuated by halts at Hyderabad, Bangalore and Madras.

The idea was to get a feel of the claims and offerings of the chief ministers of the 'competing' three states. The high-profile team was treated to some slick presentations by government officials.

In Hyderabad, Chief Minister Naidu made an audio-visual presentation on works to improve infrastructural facilities like roads. About 20 flyovers, and two ring roads, inner and outer, an expressway connecting Hyderabad airport and the HITECH city on the outskirts, are coming up at a cost of over Rs 2 billion, Naidu informed the team. He also spoke of tourism promotion and efforts to get an international airport for the city.

Naidu offered 200 acres of land for the ISB near Manikonda, which is nearby to Madhapur where the HITECH City and the Indian Institute of Information Technology -- Naidu's much-publicised projects -- are located. Naidu said this aspect offers great advantages to the school.

Elaborating, Naidu said besides completing his vision of developing the city into a real IT hub, the setting up of the ISB in Hyderabad would attract the attention of Fortune-500 companies.

The business team was impressed, no doubt. However, there were only hints of a verdict. Ambani said: "We are impressed with the all-round development taking place in Hyderabad. We feel there cannot be more ideal location than Hyderabad to set up the school."

Naidu's vision of projecting AP as an international investment destination has helped the state to command excellent rating in the financial markets, he said. Deveshwar of ITC complimented Naidu for ''developing the state into a role model''.

Afternoon. Goodbye Hyderabad, hello Bangalore. There, Naidu's counterpart, Patel, claimed the city is the best choice. On offer were 250 acres of prime land at Bidadi, near Bangalore. The team was sensitised to facts like Bangalore being the capital of Indian IT industry, a city of gardens, a tourist attraction and home of the IIM and highest number of medical and engineering colleges. Assurances about setting up of necessary infrastructure, water and power were made.

The team could visit neither the site on offer nor a few other optional sites near Devanahalli for want of time.

Top government officials however exuded confidence. Principal Secretary N Vishwanathan said: ''We are hundred per cent sure of the project coming to Bangalore.'' However, another trade and commerce official, S T Radhakrishna, said that ''it is premature to say where the project will be finally set up''.

The consortium is expected to send a smaller team this week to visit the sites and check the modalities of setting up base.

Evening. Takeoff from Bangalore. Touchdown in Madras. A meeting with TN Inc's Chief Executive M Karunanidhi followed. The latter offered ''all assistance''. In other words, besides the usual givens, 200 acres of land at Irungattukottai where a 3000-acre industrial park with the presence of the likes of Videocon is coming up. The TN government has no conditions about reservation of seats for locals.

At the end of the day, the team reserved its verdict. But government officials and local corporate bigwigs worked overtime to press home the point that they have an edge over the others. Everyone involved used the same tactic. The natural fallout was that everyone started punching holes in others' claims.

Pro-Hyderabad lobbyists said that the Karnataka government has failed to keep up its promise of providing proper infrastructure, uninterrupted power and water supply, besides controlling the cost of living.

Corporate circles were abuzz with talk of shifting of Bangalore operations by microprocessors major Intel, Inprise Corporation (formerly known as Borland) and Ramp Technologies to 'Cyberabad' (Hyderabad).

But Karnataka government official Radhakrisha said that the reported flight of capital from Bangalore to Hyderabad was much hyped up by the media. ''It is part of corporate philosophy that when a company has roughly 3000 personnel, they move away to other cities to expand activities. This is a natural phenomenon.''

Vice-Chairman and Managing Director of AP Industrial Infrastructural Corporation, R Chandrasekhar, claimed: ''We do have abundance of IT manpower at affordable cost, besides the necessary infrastructure and easy access to universities and other institutions for campus recruitments. To cap it all, we have a pro-active government headed by a visionary (Naidu). ''

Interestingly, N R Narayana Murthy, chief of Infosys Technologies, offered another perspective. He said his company set up base sometime back in Bhubaneshwar, Orissa, calling the move ''expansion and growth''. He said he now realises it was improper. ''Why does anyone grudge if people set up base in Hyderabad, isn't it part of India?''

R Sivakumar of Intel Asia Electronics said that there is a definite need -- and demand -- for many more quality management schools. He said irrespective of where the ISB comes up, it will enhance the city's value, making it cosmopolitan. ''I think the Karnataka government must push hard for this project and get it started as early as September 1, 1998.''

Adding a new twist to the story, S K Nandy of Titan Industries observed that IIM graduates generally have an air about them. ''They could do with some genuine competition. The proposed ISB should strive to be the very best.''

To that, Professor V Nagadevara, dean at the Indian Institute of Management in Bangalore, retorted: ''Let me assure you, we don't mind the competition at all.''

And then, the professor added : ''I hear a lot of money will be pumped in to the project. Maybe IIMs can't do that. But money apart, the IIMs remain the best management institutions in the world. We've some of the finest faculty teaching here. They speak of collaboration with Wharton, but we get experts from Wharton, MIT, Harvard and other premier institutions to teach here.''

But what would take the cake is perhaps AP CM's assertion that he is not in competition with his counterparts in other states. ''I've already established Andhra's leadership in IT. Now I want to compete with the Silicon Valley.''