GANDHINAGAR: The Gujarat government has chosen not to extend the lease of Creative Infocity Ltd, the developer behind the state’s key Infocity project in Gandhinagar. This decision paves the way for the government to regain control of the extensive 116-acre campus once the concession period concludes in 2030.
This decision, made at the highest levels of state government, follows a prolonged dispute between the government and the developer over alleged breaches of the concession and lease agreements. While the 30-year lease is set to expire in July 2030, the Department of Science and Technology has begun steps to reclaim the land and assets post-concession, as per official sources.
“There is no reason to extend the lease due to reported contractual violations. The government issued termination notices back in August 2008, but the matter entered arbitration and has been under legal review for years,” stated a senior official from the government.
Sources indicate that the government plans to compensate Creative Infocity Ltd for the buildings and infrastructure developed on-site, with valuations determined based on the depreciated asset value. “However, the compensation is expected to be considerably less than the liabilities from the lease violations,” noted a source.
The Infocity project was envisioned as Gujarat’s first integrated IT township, aimed at drawing prominent IT and tech companies to the state by offering superior infrastructure within a single location. A pre-feasibility study conducted with aid from PwC and Gujarat Informatics Ltd, the government’s nodal agency for project implementation, supported this initiative.
A concession agreement was signed between GIL and Creative Infocity Ltd on August 1, 2000, with a master lease agreement finalized in February 2001, securing 116 acres in Gandhinagar for the IT township’s development.
However, conflicts between the government and the developer arose within a few years. In August 2008, Gujarat Informatics Ltd issued final termination notices instructing the company to relinquish the project site and return the assets to the government.
Some violations noted included the commercial exploitation of over 39 acres, deviation from the approved land-use plan, construction schedule infractions, failure to provide security in the required format, disagreements over revenue-sharing, unauthorized sales of Infocity properties, unpaid project development costs, and neglect in appointing independent engineers and auditors as required by Gujarat Informatics Ltd.
Initially located on the outskirts of Gandhinagar, Infocity is now within the city limits due to urban growth over the last twenty years.
