A second bidding round for Mangaluru's ₹135-crore IT Park is drawing only lukewarm interest, with industry voices pointing to site access and lease terms as the real blockers.
For the second time in five months, the Karnataka government has reopened bidding for its proposed ₹135-crore IT Park in Mangaluru after the first round of tendering failed to attract even a single bidder. The development has raised concerns over the viability of the project, which is planned on 3.2 acres of public land near Blueberry Hills Road in Derebail as part of the state's "Beyond Bengaluru" initiative aimed at promoting technology growth in emerging cities.
The project is being tendered by the Karnataka State Electronics Development Corporation (KEONICS), which has now launched a second round of bidding after the initial process closed without any takers. The first round of bidding had opened on December 15 and closed a month later, but failed to generate any response from developers or investors. The second round is currently underway and is scheduled to close on May 22. According to sources, only one bidder has shown interest so far, indicating that investor sentiment around the project remains weak.
Industry stakeholders say the lack of response is not due to an absence of demand for office or IT infrastructure in Mangaluru, but rather because of multiple structural and commercial issues attached to the project. They argue that stringent technical requirements, poor site readiness and lease terms that do not match local market realities have together made the project unattractive to potential bidders.
One of the biggest concerns flagged by stakeholders is connectivity to the site. Despite the land being available for nearly two decades, basic road access to the proposed IT Park has reportedly still not been developed. Industry representatives say that this has significantly affected investor confidence, as infrastructure readiness is one of the most important factors in the success of commercial and IT park developments.
Sources familiar with the matter said that the original tender included several conditions that made bidding difficult for many potential participants. While local industry representatives were able to convince the government to relax some clauses, many restrictive technical and commercial conditions still remain in place. As a result, the revised tender has not generated the level of market interest the government may have expected.
A realtor involved in IT workspace development in the region said that the city's weak basic infrastructure has long hindered Mangaluru's growth as an IT destination. He pointed out that Mangaluru was once home to one of the earliest Software Technology Parks of India (STPI) facilities, but its technology ecosystem has not grown at the same pace as Bengaluru. According to him, the city does not necessarily need large-scale expansion at this stage, but rather better foundational infrastructure — especially dependable road connectivity — to support commercial development and attract IT occupiers.
Vinod Pinto, President of CREDAI Mangaluru, also raised concerns over the commercial structure of the project. He said the body had already flagged the issue of high rental expectations, noting that bidders expected more competitive lease terms since the land is government-owned. According to Pinto, Mangaluru should be treated as a Tier-2 city in terms of pricing and policy support, rather than being benchmarked against Bengaluru or larger metropolitan markets where rental values and commercial absorption are significantly higher.
Under the current tender model, the selected bidder will receive the land on a 30-year lease under the Design-Build-Finance-Operate-Transfer (DBFOT) model, with an option to extend the lease by another 30 years. While this framework offers long-term development rights, stakeholders argue that the financial viability of the project will remain under pressure unless the government revises rental assumptions, improves infrastructure around the site and further simplifies the bidding requirements.
The proposed IT Park is part of Karnataka's broader effort to decentralise the state's technology growth and encourage investment beyond Bengaluru. Mangaluru, with its educational institutions, port connectivity and emerging urban base, is often seen as a city with strong long-term potential for IT and knowledge-based industries. However, the repeated struggle to attract bidders for the IT Park suggests that policy intent alone may not be enough.
Unless key concerns related to site access, infrastructure gaps, technical clauses and market-aligned lease terms are addressed, the Mangaluru IT Park project may continue to face challenges in securing developer participation. For the state government, the response to this second tender round will now be closely watched as a test of how effectively the "Beyond Bengaluru" vision can be translated into on-ground investment opportunities.
