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BW Businessworld

Bottlenecks To Success

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In the early hours of Sunday, 7 August, a power transformer that supplies electricity to New Delhi's brand new T3 airport terminal tripped. The backup that was supposed to smoothly kick into action and take the load immediately failed to function. It took over four hours to sort out the problem and restore power to the airport. The power outage threw everything out of gear. Check in procedures came to a grinding halt. Almost 70 flights got delayed. Security checks became manual and laborious as the X-ray and scanning facilities stopped working. Passengers stuck inside complained of feeling suffocated. A week later, it is still not clear why the supposedly failsafe backup systems failed to function.

The T3 power fiasco is a good example of why India is still to get its infrastructure act together despite all the progress of the past decade. The T3 terminal of the Delhi airport is an international grade airport that the Indian government considers a showpiece — both in terms of scale and facilities, as well as an example of public-private partnership (PPP). It was built at a record speed. (Its critics pan its lack of signature architecture and the planning of its layout, but most agree that it has the scale and the facilities that match up to many of the more famous international airports). And yet, despite building a worldscale airport, Delhi International Airport (DIAL), which built and operates the airport, still could not sort out the problems quickly enough when the power failed.

Or take, for instance, India's telecom — especially mobile telephony — infrastructure. It is widely considered to be one of the biggest successes of the past two decades. India boasts of some of the lowest rates of telephone calls. Mobile telephone services are widely available and are affordable even to the very poor. The telecom revolution has been responsible for providing the backbone that helped the amazing growth of the Indian IT services and ITeS (IT enabled Services) industries. At least one home-grown telecom company has become an international giant riding on its successes in the domestic market. Despite that, the biggest Indian public sector telecom player — Bharat Sanchar Nigam (BSNL) — which had hoards of cash only a few years ago is now staring at bankruptcy. Meanwhile, the last round of 2G telecom licence clearances erupted into a huge scandal and the mess is yet to be cleared up.

The story is similar in almost any infrastructure area you take up. In roads, 20 years ago, there were only 31,700 kilometers of National Highways. Today, we have 70,934 km of national highways. But there is also an unbuilt stretch of 22 km that holds up the closing of the loop of the Golden Quadrilateral project that was supposed to link up all the four metros.

In power, a combination of improved policy and some pro-active steps taken by both central and state governments have ensured that we can expect a record addition to our power-generation capacity in the next five years. On the other hand, distribution still remains a problem as bankrupt and inefficient state electricity boards struggle to upgrade infrastructure and pay for the electricity they buy.

So having come so far, and having achieved a fair amount of success in certain areas of infrastructure, what do we need to do to ensure that the infrastructure story does not get derailed or choked off because of missing links?
First, there are the policy and execution issues that need to be sorted out. As deputy chairman of the Planning Commission Montek Singh Ahluwalia says, the private-public-partnership is working better in many sectors than many had initially imagined.

And yet, a lot of work still needs to be done to see that contracts are not deviated against, that timelines are met and other such issues.

Similarly, there are a host of issues — from land acquisition for infrastructure and public projects to planning for future transportation needs of our urban centres — that need to be addressed. In telecom, while the voice revolution has taken place, the broadband infrastructure is lagging way behind for comfort, and policies have to be evolved to make the country enjoy proper broadband. In power, the success in the power generation sector needs to be matched by policy changes and aggressive action on the transmission and distribution fronts.

And then there are other issues such as transparency during awarding of contracts and tackling the endemic corruption in most infrastructure sectors.

In the following pages, you will find detailed reports, interviews and data that give a clear idea of what we have achieved in the past 20 years — and the specific issues in the areas of roads, telecom, power and urban infrastructure that need to be tackled.

bweditor(at)abp(dot)in

(This story was published in Businessworld Issue Dated 22-08-2011)