(AFP) – Sep 25, 2007
BELGRADE (AFP) — An Indian company looking to cash in on eastern European "near-sourcing" signed a deal here to construct an IT park that Serbia hopes will become the biggest on the continent.
The deal with Bangalore-based property developer Embassy Group was potentially worth up to 600 million dollars (425 million euros) over five years, which would make it Serbia's biggest ever greenfield investment, said Economy and Regional Development Minister Mladan Dinkic.
Greenfield projects are implemented from the ground up by an investing company on sites where there had been no previous activity.
"I'm very satisfied ... that today I signed a memorandum of understanding for the construction of the first IT park in Serbia and, I'd say, the future biggest technology park in the whole of Europe," Dinkic told a press conference.
Initially, the technology park would occupy 280 hectares (690 acres) of land in an industrial zone of the northern town of Indjija, where it would employ around 2,500 IT professionals, said Dinkic.
However, depending on client uptake, it could be expanded during the next five years to offer global IT companies 250,000 square metres (2.7 million square feet) of office space for up to 25,000 employees, he added.
Embassy Group chairman Jitu Virwani welcomed the agreement for the project, which he said had already attracted interest from some of its biggest clients, such as IBM and Hewlett-Packard.
"We've been looking for an east European country, mainly from the perspective of having some of our clients from the IT sector to be servicing the eastern European market," Virwani said at the end of the signing ceremony.
"After a lot of research, we found Belgrade to be highly suitable for the needs of our clients, more from the perspective of costs.
"We see Serbia as the same position as Bangalore or India was, as far as the IT sector (is concerned), in 1991," said Virwani in reference to the city seen as his country's Silicon Valley.
Embassy Group, he added, was a company that had one of the biggest number of tenants leasing space at its IT parks around the world.
The deal aims to capitalise on the growing shift among global IT companies to "near-source" technology services closer to Western clients, rather than outsourcing them to India, where costs are rising.
It is seen as yet another win for Indjija, whose mayor Goran Jesic has already won praise for fostering an "economic miracle" in the town, halfway between Serbia's two biggest cities of Belgrade and Novi Sad.
In an interview ahead of the announcement, Jesic told AFP he was confident the project would also boost the national economy and help to improve Serbia's war-tarnished image.
He said he hoped it would also help to persuade young Serbs who left the country in the brain-drain that went with the bloody collapse of Yugoslavia that they have a future in their own country.
Virwani said Embassy chose Serbia ahead of other former eastern bloc countries such as the Czech Republic largely because of its potential to lure back some of these young talents.
"We are ... aware that a large number of Serbians work in software companies all over the world, especially in the US," said the Indian businessman.
"Most of these people are of intelligence and quite highly-placed within these companies ... and we're hoping that they'd want to come back to their country."
Along with its growing economic reputation, Indjija shot to prominence among European funk-rock fans in June when some 100,000 of them converged on it for a Red Hot Chilli Peppers concert.
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