IT park running out of space

In what could rid its image as a white elephant, there are more than 600 Bhutanese employed at the IT park today and almost all of its office space has been rented out.

Its largest tenant, US based Scan Cafe which employs around 400 Bhutanese, will be holding another recruitment drive for 150 more posts, today. This could send the total number of Bhutanese employed at the park to around 750 shortly.

The same company plans to continue recruiting this year and have about 700 Bhutanese employees alone by year end. This could mean there could be close to 1,000 employed at the park by the end of 2016.

But this raises an unexpected problem.

Of the 50,000sqft of office space available at the park, more than 90 percent has been rented out, and more space may not be available for further expansion or potential new large tenants.

For instance, the park’s operator even partitioned off a common space area to house a Swiss IT firm given the lack of space.

The situation is very different from just two years ago when the majority shareholder, Assetz Property Group of Singapore, pulled out and sold its stake to Druk Holding and Investments (DHI) just two years after operations began at the IT park. Initial expectations were high with hopes of bringing in a major international IT firm as an anchor tenant.

When this did not happen and vacant space at the park could be observed, it was often labelled a white elephant by the media and public.

“The IT park was never a failure actually,” said Department of Information Technology and Telecom (DITT) economist, Chencho, adding that such projects take time to succeed anywhere in the world. The DITT played the role of facilitator in not only simplifying the bureaucratic procedures Foreign Direct Investors (FDI) would need to manoeuvre through but also in assisting the IT park in acquiring and providing incentives, such as an internet subsidy and initial fitting out or furnishings for tenants, among others.

He pointed out that almost Nu 12 million is being earned from the FDI companies at the park in terms of salaries, rent, electricity and internet, today.

But with the decreasing space available, Chencho said that a few small sized FDI firms that would have employed around five people each have had to be turned away.

However, interested FDI companies that could employ larger numbers are likely to be catered to and temporary housing arrangements made until another IT park building is constructed, Chencho said.

“Yes the IT park is almost full now but we will not turn away potential clients,” said Thimphu TechPark pvt ltd (TTPL) chief operating officer, Tshering Cigay Dorji. TTPL operates the IT park. “We have the full support of DHI, our shareholder, to create more space as and when there is more demand,” he said. He reiterated that building a second structure would depend on demand.

Chencho pointed out that on average, 2,800 IT graduates are produced annually  and again on average, 800 are absorbed by the private sector. To absorb the remaining, more FDI companies may be required, which in turn may require a second IT park, perhaps constructed in Paro, he said.

However, he also pointed out that an IT park would not only employ IT graduates. For instance, he said that the Bangladeshi firm at the park, Southtech, employs several business students.

Southtech currently employs 13 Bhutanese, and is training 25 more.

Scan Cafe CEO, Naren Dubey, also agreed that there is no more space available. “We will have no choice but to grow elsewhere in India or think about a two-shift model in Bhutan with a day and night shift,” he said. “We don’t really want to do a night shift since we believe that it will not improve GNH – we don’t want to be like a typical BPO in India or the Philippines,” he added.

Naren Dubey said that if TTPL cannot provide the space the company requires as it grows, the government and DHI could help the company with a hybrid model where it is allowed to rent commercial space in Thimphu city. “Once TTPL builds additional infrastructure for growth, we’d be happy to relocate back to TTPL,” he said.

Naren Dubey said that such an arrangement may also solve some of their transportation problems which Scan Cafe and other tenants of the park have been facing for the past year. With not enough buses plying between the city and Babesa, where the park is located, employees have been facing problems in getting to the park on time. “Bhutan positions itself in the world to be a green and eco-friendly country and it has taken such wonderful policy initiatives in the past,” he said. “Bhutan needs to keep up this promise and focus on public transportation if it seeks to grow its ITES industry in the Thimphu tech park which is located outside the city in Babesa.”

He added that the company will be meeting with senior government officials next month to put in place solid plans.

Tshering Cigay Dorji agreed that transportation is the park’s most pressing issue at the moment. “We’re hoping the government would give priority to the IT park when Bhutan Post gets its new fleet of 18 buses soon,” he said.

The government recently provided funds to the transport company to purchase 10 buses by mid-this year.

Scan Cafe has also started building a Bhutanese management team comprising of 20 graduates from local colleges. “It is critical for us to build the senior management team in Bhutan with Bhutanese people for long term sustainability,” he said. The company has also started a day-care centre with TTPL’s help. “I think we are the first company in Thimphu that has enabled a lot of women to re-enter the work force. They can be close to their children in the office while building their career,” he added.

“The Thimphu tech park is almost full, something that many people didn’t believe would happen,” Naren Dubey said.