The source told The Financial Express that the Karnataka IT department was holding discussions with other companies too, but had almost settled on ITI and an official statement to this effect would be released soon.

Estimated to be set up at an investment of Rs 40 crore, the 2,59,000 sq.ft. STP would mainly target IT-enabled service providers. The project was expected to be operational in six months' time, he said.

He said two medical transcription companies (SN Medical Services and Kshitija Technologies Ltd) connected to some US pharmaceutical giants had already booked plots at the STP to set up their transcription units.

Earlier speaking at a seminar on `Business Opportunities in IT-enabled Services' here on Monday, state IT secretary Sanjoy Das Gupta said the state would open training centres for IT-enabled servicesin select towns.Mangalore and Mysore would soon have development centres for embedded software and e-commerce respectively, he said.

"After software, it is time for India to concentrate on IT-enabled services that will create huge volume of employment opportunities for semi-skilled personnel." He said the size of the sector in US was $150 million and India was just beginning to enter it.

He said the IT secretariat was in the process of finalising details regarding the proposed software engineering institute at STPI. "In this regard, we have already signed an MoU with LG Software and Indian Institute of Science. To finalise the issue, a high-level US delegation will visit India during September," he added. LG software will put in $3 million to fund the project. The Carnegie Mellon University of US would have its certification centre at the institute.

State chief secretary BK Bhattacharya said Bangalore had always maintained a lead role in IT and in the next 10 years the city would keep its leadershipposition.

Speaking on the occasion, industries commissioner VP Baligar said the country had tremendous potential for IT-enabled services. Currently, the sector with a turnover of Rs 980 crore provides employment to 23,000 people. By 2008, the sector was anticipated to reach Rs 81,000 crore with a personnel strength of 11 lakh, he added.

IT-enabled services comprise back office operations, revenue accounting, data entry, data conversion and remote maintenance and support. Other areas in the sector are medical transcription, insurance claims processing, call centres, database service and content development.