Will Vedanta University relocate to Tamil Nadu or Andhra Pradesh?

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Anil Agarwal’s projects in Orissa seem to be running into rough weather. His Niyamgiri Hills mining project has received a fresh blow with the Attorney General endorsing the environment ministry’s powers to not give clearance to the project. Agarwal’s other project in Orissa — Vedanta University — seems to be going nowhere. It appears it would take years before the first brick is laid on his most ambitious, and grandest, education project.

Agarwal, founder of London-based Vedanta Group, turned heads in 2006 when he said he would set up an 8,000-acre, $3-billion university under the aegis of Vedanta Foundation (which later changed its name to Anil Agarwal Foundation or AAF) in the state’s coastal town of Puri. He also offered $1 billion from his personal funds. Agarwal’s holding in his companies is worth more than $10 billion (as on 31 March 2010).

However, as with most projects requiring land acquisition, the university project, too, got mired in controversy. On 17 March, Orissa Lok Pal Justice P.K. Patra recommended a vigilance probe against AAF’s land deals. In May, the environment and forests ministry withheld clearance for the university, citing “irregularities, illegal, unethical and unlawful deeds”.

With the odds stacked against it, AAF is weighing other options. “Two states have extended an invitation; a decision is likely to be taken on a new site in two months,” says Ajit Kumar Samal, in-charge of the university project. He, however, refuses to divulge more details. Experts say the alternatives to Orissa could be Tamil Nadu and Andhra Pradesh, which have good educational infrastructure. “Any place near Hyderabad or Chennai would be a good location,” says Narayanan Ramaswamy, head of education practice at consultancy firm KPMG.

The more important question, though, is: is a large university of this kind feasible in India?

Too Ambitious?
Vedanta’s justification for requiring so much land is simple — to build an institution on the lines of Stanford and Harvard. The 8,180-acre Stanford University was established in 1891. Harvard, set up in 1636, is the oldest institution of higher learning in the US, and has about 5,000 acres. But both were set up when land was not a precious commodity. Besides, the US is a far bigger country than India, and can afford to have universities of such scale.

For a densely-populated country like India, 8,000 acres of contiguous land — later scaled down to 6,000 acres — for a university is hugely ambitious. Delhi’s Jawaharlal Nehru University, for instance, has only 1,000 acres. Large universities like Hyderabad Central University and Banaras Hindu University have 2,300 acres and 1,300 acres, respectively. Utkal University, Orissa’s largest, functions in 400 acres.

“In today’s age of high-speed broadband communication, there is no need to be hell-bent on geographical proximity,” says Ramaswamy. The entire knowledge city in Dubai, which houses 30 universities and 450 business partners catering to over 40,000 students, functions well within about 575 acres of land.

Samal doesn’t agree, though. “The architecture is prepared keeping in mind the topography of the place. In Puri, there are no high-rise buildings and hence a ‘horizontal’ plan.”

But now, with Vedanta talking about other states’ interest in the university project, what happens to the 4,000 acres already acquired for it by the Orissa government?

Cheap Land
AAF doesn’t seem to have given it much thought. Developing this as an off-campus could be an option. But locals say the land acquisition is just on paper and “the land will continue to belong to those who reside on it now”. Samal says that AAF has spent Rs 100 crore on land acquisition so far. For 4,000 acres, that works out to Rs 2.5 lakh per acre, among the cheapest rates in India. The area is strategically located between Puri and Konark on the sea coast.

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Others, too, have got land at cheap rates in Orissa for educational institutes. Harivansh Chaturvedi, director of Greater Noida’s Birla Institute of Management Technology (Bimtech), says that Orissa had offered land at Rs 7 lakh per acre in 2001; Bimtech bought 30 acres for Rs 2.20 crore. Haryana had offered 7 acres for Rs 17 crore. In 1985, Xavier Institute of Management was given 20 acres with a building at Bhubaneswar for free. The institute, in turn, reserves 50 per cent seats for local students.

AAF’s other option is to monetise the real estate by coaxing technology giants such as IBM, Wipro, TCS and Infosys to set up research facilities in the campus. It also wants to invite venture capitalists to fund start-ups doing research projects and develop this as a hub of innovation, in much the same way as Stanford does.

However, this won’t be easy. According to Praveen Bhagdada, manager at Bangalore-based Zinnov Management Consulting, technology companies weigh the pros and cons of an institute before signing up with it. “It is early days yet,” says an executive with a top IT firm.

Companies such as Hewlett-Packard, IBM, Motorola, Mitsubishi and Lockheed Martin are located in the Stanford Industrial Park. Blue-chip companies such as Silicon Graphics, Sun Microsystems and Cisco had begun as ideas in the university’s computer science department.

Agarwal would be hoping for a similar miracle in India. Whether that will happen in Orissa or somewhere else, or whether it will happen at all, is a billion-dollar question.

shalini dot sharma at abp dot in (This story was published in Businessworld Issue Dated 02-08-2010)