Satyam cans $75 million Geelong project
Two thousand potential Victorian jobs may have evaporated after Mahindra Satyam this week pulled its plans to build an information technology learning centre at Deakin University in Geelong.
The company's president, Sujit Baksi, had on 8 April written a letter seen by ZDNet.com.au to Victorian Minister for Finance and ICT, John Lenders, explaining that it was no longer able to invest in the $75 million dollar project. Baksi blamed the the global financial crisis on its decision to withdraw.
"Our current global capacity does not at this stage warrant any additional investments in infrastructure to deliver IT services. The need to concentrate on an extensive internal restructuring program of our business precludes Mahindra Satyam from embarking on expansion projects of this kind," wrote Baksi.
"The company has said it would not proceed with the project, so the agreement has concluded," Lenders told media today.
There were signs in August the project may have hit troubles after Mahindra asked for some breathing space to reconsider it.
Lenders today said the amount due to it from Mahindra Satyam was in the "millions", but would not disclose the figure when pressed by media. "I'll tell you categorically that we are asking for the money back from the company and the Auditor General will hold us to account," Lenders said. He insisted Geelong was still a good place to invest, but did not say whether he would pitch the project to an another IT company.
"ICT jobs in Geelong — we are actively pursuing jobs at all time," said Lenders.
Funding for the project had been sourced from The Greater City of Geelong, the Victorian Government and Mahindra Satyam. The centre was expected to create some 2,000 new jobs and had already employed around 50 people when it was announced in April. Construction was expected to commence in late 2009.
The deal had already struck between Satyam Computer Services and the state government prior to Tech Mahindra's acquisition of the Indian IT and business process outsourcing company.
Baksi noted in his letter to Lenders that the title to the land was never transferred to Mahindra Satyam, meaning it is still owned by the university. Baksi said the company would pay back the money awarded to it by the Victorian government in the next 30 days.