Friday, 7 June 2013

West Bengal government may ask Nokia Siemens to vacate Kolkata factory



KOLKATA: The West Bengal government is likely to reclaim a prized 9 acre plot from Nokia Siemens Networks following the European gearmaker's recent decision to shut its loss-making Kolkata telecom factory on July 31 as part of a global decision to sell non-profitable wireline assets worldwide to cut losses.

Though NSN is an equal joint venture between Finland's Nokia and Germany's Siemens, the land belongs to Siemens, which was allotted the nine acre plot on a 99-year long term lease about 15 years ago by the state government well before the formation of NSN in 2007.

"The state government will shortly write to Siemens AG to vacate the land, post-shutdown of NSN's telecom factory since it has failed to come up with an alternate land utilisation plan," said a top state bureaucrat.

The West Bengal government has repeatedly urged Siemens to honour an earlier pledge of setting up an IT-cum-telecom park on the NSN factory land, post-shutdown of the telecom factory.

"Since Siemens has not come up with any concrete plans on what it proposes to do with the land even after NSN's closure notice, we will shortly ask them to either set up the IT-cum-telecom park or vacate the premises as there is a serious paucity of quality land for greenfield tech ventures in Kolkata," said the official quoted above.

Siemens declined to reply to ET's queries on what it planned to do with the factory land, post-shutdown of the NSN factory. "As a policy, we do not comment on market speculation," said a company spokesman.

The stakes are big since the state government is inundated with corporate applications for this prime piece of real estate in the heart of town, whose valuation has shot up in recent years. While Siemens was given the 9 acre plot for a pittance (roughly Rs 32 lakh per acre) by the state government, property consultants peg its current valuation at roughly Rs 300 crore.

Satendra Singh, who heads NSN India's manufacturing operations, declined to comment on the fate of the Kolkata factory land, post-July 31 closure. "The lands belongs to our JV partner, Siemens, and it is for them to take a final call," he said.

NSN had attributed its decision to close the Kolkata landline products factory due to a rapidly dwindling order-book position coupled with the company's refocus on mobile broadband.

The Finnish-German telecom vendor's decision to close its landline products factory in Kolkata is linked to its global decision to cut 17,000 jobs worldwide as part of a restructuring plan aimed at cutting losses. In India, bulk of the cull involves wireline assets deemed non-core and out of sync with NSN's focus on mobile broadband and services.