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The Case For Staying With Ethanol 10

Ethanol blending over 10 per cent may be desirable but a full understanding of its environmental and economic impacts is crucial.

Shyam Ponappa  August 3, 2023

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Shyam Ponappa on ResearchGate

Comprehensive, Integrated Strategy & Execution

India has been coasting along on a post-feudal-colonial mélange of currents and tides, with the brigandage of opportunistic politics fed by our (the voters’) greed for short-term benefits. The result is grotesque populism and corruption, in lieu of the deferred gratification of pleasing cities and countryside with the appurtenances of proper governance: sidewalks and drains, toilets, transport, administration and order, hospitals and schools.

We have to organize and manage ourselves, “engineer” our way ahead, taking steps to build and develop our solutions, building systems and processes, and not just wait for things to happen. We need a comprehensive and integrated, systemic, silo-busting, problem-solving approach.

This applies across the board in the broadest “spatial planning” sense that integrates housing and land use at all levels with commercial, industrial, cultural, scientific and educational activity, transportation, and all governance and infrastructure: water, sewerage, energy, communications, basic health and education. Infrastructure being the first level of enablement is the essential starting point.

Previously, India’s leaders acknowledged that infrastructure is India’s great need. Yet, they took no steps [exception: NTP-2011 in October, 2011] to marshal forces to draw up a credible strategy and execution plan. This is what needed and needs doing. Only good intentions and/or money won’t do, because delivery systems and processes have to be developed, i.e., planned, and built from scratch.

It looks like the NDA II will seriously address the development of enabling infrastructure.  A beginning on a long way ahead.  The next few months will demonstrate the resolve of the NDA II to really break the mould and get the job done.

- July 2014

And it got worse for Digital India with another spectrum auction [March 2015] and the attendant deprivation of network rollout and service delivery. 

...And worse: another auction with Rs. 109,000 crore (~$17.6 billion). - April 2015

... And yet worse, as another auction reduced investment by over Rs. 65,000  crore  (~$10 billion). - October 2016

... And annual auctions threatened from 2017! - March 2017

Lack of integrated systems and controls led to the worst bank fraud in India - PNB $2 billion - February 2018  And IL&FS - September 2018

The National Digital Communications Policy 2018 is only an aspirational statement - October 4, 2018

Big bang for Wi-Fi!  5 GHz regulations similar to the US FCC. - October 2018

As the sector stalls, government talks 5G spectrum auction, wanting more cash while the industry drowns in debt. - January 2021  

The Supreme Court reverses previous rulings in favour of telecom operators on retroactive charges for spectrum based on an all-inclusive definition of Adjusted Gross Revenues continues...

Another ill-advised auction - March 2021.  And another monumental failure, neither serving the government's cash needs (too much left on the table), nor the consumers (too much spectrum left untouched).

A reversal (FINALLY!) of the retroactive tax amendment affecting Vodafone, Cairn, and others - August 5, 2021.

Spectrum Usage Charge zeroed; past due demands being reconsidered? - October 7, 2021

5G Spectrum Auction July 2022 nets Rs. 1.5 lakh crore (about $19 billion), making that amount of capital unavailable for investment in networks.  Allocation of an even larger amount to reviving BSNL and MTNL increases uncertainty of outcomes.

List of Articles with Hyperlinks

1 FX Reserves & Infrastructure

[Finance/Economics]

2 The Rewards of Excess: Benefits of Growth Exceed Costs
[Finance/Economics]

3 Learning from Our Champions
[Goals, Tasks & Project Management

4 Organizing Aviation (Competition, Open Skies ...and Bust?)
[System (Re)building: Organization & Systems] 

5 Organizing: Biofuels (More Energy for Ethanol and Biodiesel!)
[System (Re)building: Organization & Systems] 

6 Thinking Big - Scale, Ownership & Results
[System (Re)building: Organization & Systems]

7 Organize - by the Judiciary? (Dispute Resolution & India's Body Politic)
[System (Re)building:Organization & Systems]

8 A Tale of Two States (Gurgaon vs Bangalore)

[System (Re)building: Organization & Systems]

9 Organizing PSU's: Performance is the Key
[System (Re)building: Organization & Systems]

10 Organizing Ourselves - 1: Systematic Reforms (It Can Be Done Here)
[Goals, Tasks & Project Management]

11 Safeguarding India's Capital
[Finance/Economics]

12 India’s Growth Engines: Services + Manufacturing (Breaking the Mould)
[Goals, Tasks & Project Management]

13 Prioritization & Planning: A ‘Ballooning’ Approach (A Wish List for India's Dream Team)
[Goals, Tasks & Project Management

14 Governance Successes (Bull's Eye for Governance)

[Goals, Tasks & Project Management]

15 Organizing Renewables- Next Steps for Biofuels)
[System (Re)building: Organization & Systems]

16 An Investment Fund for India
[Finance/Economics]

17 Integrated Area Planning (Spatial Planning) [Infrastructure: Rural & Urban]
[Goals, Tasks & Project Management]

18 Tata's Corus Buy-A Game Theory Analysis
[Game Theory: Collaborative Gains]

19 Productivity Reforms: Government from Ruler to Facilitator (Beyond India's Tipping Point)
[System (Re)building: Framework & Principles]

20 Productivity & Regulatory Constraints (Opportunities for the Left)
[System (Re)building: Framework & Principles]

Flowcharting a Digital India [Getting to Digital India]

Government must plan in detail each step to be executed in sequence to take India to end-to-end connectivity.

Shyam Ponappa  |  February 4, 2015


With the economic mood having swung in India's favour, partly by inspired effort and partly by the luck of falling prices for oil and commodities, how can we effectively capitalise on our disorderly yet undeniable potential? Asked by Prime Minister Narendra Modi last October what could be done to promote business in India, the chief executive of Siemens, Joe Kaeser, reportedly said: (a) prioritise, and (b) take one step at a time. Surely good advice, and not just for promoting business and growth.

There's a subtext in that terse advice that we and our governments would do well to deconstruct and internalise. And that is the underlying discipline, process orientation and order in the German work ethic that produces high quality. Other attributes such as thoroughness and being result-oriented come to mind, all of which would do us well, but an essential precondition is the discipline of meticulous, step-by-step process planning and execution for results.

In other words, there are explicit activity flows that extend from where one is to where one hopes to be, the desired ends, delineated in flowcharts that underlie integrated systems. After prioritising and goal-setting, it is these detailed steps that must be articulated before starting out on the first step. This applies to Digital India as much as to any other initiative, such as Swachh Bharat, or energy or transport development.

Where and how do we begin to prioritise? With a focus on productivity, because that may be the best way to escape the boom-to-seven-or-eight-per-cent-gag-on-inflation-bust cycle. To this end, if we can get more things right in infrastructure especially relating to communications to begin with, it will enable growth with less risk of asset bubbles and demand-driven inflation.

To materialise, improvement in communications will need to be in combination with some level of improvement in energy and transport/logistics, to the point where gains from communications are realised. This is likely to happen by improving the extent of realisation for efforts and inputs, through productivity gains from such areas as, for instance, online education, transactions and logistics tracking. In sectors such as healthcare or tourism, productivity could improve with online transactions relating to accommodation, transport and procedures/events. Obviously, there need to be satisfactory facilities and services available to users in these sectors, without which there will be few gains.

The reason for starting with communications is that returns on investment tend to accrue sooner and for a lower magnitude of investment than from other capital-intensive infrastructure such as energy or transport. In addition, this potential is enhanced by the likelihood of significant pay-offs from purely administrative and/or legal changes. This is possible because legacy developments in India in communications are such that the same assets and capital expenditure can result in greater delivery capability - capacity and throughput - from "simply" changing the administrative rules, that is, by framing enabling regulations.

A case in point is the opposition by the department of telecommunications (DoT) to 3G roaming. This kind of restriction results in a reduction in output from investment, because available capacity (that is, a readily usable service) is constrained. Is it likely that the DoT would intentionally deprive the economy of the productivity gains from roaming? Or is it more likely that the motivation to protect the position of the public sector companies, Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), and the fear of being accused of giveaways to operators after the accusations in the 2G spectrum scandal have hamstrung decision-making that would be more beneficial for the common good?

Constraints such as these seriously hamper the scope of Digital India, an initiative that would add hugely to productivity when India sorely needs greater enabling capacity for a larger number of young people. Yet high-speed internet, the first item in the Digital India vision statement (deity.gov.in/sites/upload_files/dit/files/Digital India.pdf), doesn't appear to be getting the step-by-step, detailed flowchart approach that will help get us there, despite the hoopla.

Consider the evidence:

• Our spectrum policies are unchanged, with the government expecting Rs 1 lakh crore from the coming auction. Our networks will be deprived of that investment, as they've been deprived of previous payments in spectrum auctions. One estimate is that the investments in networks and equipment, excluding spectrum, amount to $30 billion (Rs 1.8 lakh crore), while cumulative charges for spectrum also amount to the same (www.financialexpress.com/article/economy/spectrum-auction-running-out-of-cash/30603/).
  
  Instead, if authorised operators were able to access broad swathes of spectrum on a pay-for-use basis as needed without ownership, imagine what it could do to increase investment in networks and services.
   
• A 2009 study by ABI Research estimated that operators could save $60 billion worldwide over the following five years from active infrastructure sharing. This assumed active sharing of the entire network, including the radio access networks (RAN) and spectrum. The estimate of incremental savings from active sharing over passive sharing was 40 per cent. If network sharing were adopted on common-carrier, pay-for-use principles, imagine how much more effective coverage in rural/less-populous areas could be, and how the payback potential would improve. A more recent article reinforces this finding, emphasising the benefits to tower companies as well as operators ("Active RAN sharing business models can bring benefits to towercos as well as operators", www.analysysmason.com/About-Us/News/Newsletter/Active-RAN-sharing-Oct2014/).
   
• Digital India needs to have access to more spectrum at less cost to bridge the last mile, in addition to considering other innovative approaches such as cable and satellite technologies, and TV bands that can be used for broadband delivery of TV broadcasts as well as the internet.

In sum, we need the end-to-end connectivity planned and extended beyond the National Information Infrastructure concept down to household clusters and individual households, as well as to commercial and educational units and customer service centres. The regulations and methods that enable structures, organisations and procedures that could make this possible involving government agencies, public sector units, private operators and service providers need to be worked out to get the benefits of a fully Digital India.

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                                                                          shyam no-space ponappa at gmail dot com 

(Fixing) India's Systemic Flaws

We need breakthroughs in tax claims and coal and spectrum allocation, but most of all, in societal accord

Shyam Ponappa  |  November 6, 2014

On the face of it, several developments augur well for the economy. But major systemic flaws persist that must be overcome.

Some gains have resulted from Prime Minister Narendra Modi's direct selling and "heavy lifting", as in eliciting Japanese investments. Others, such as the drop in petroleum and commodity prices, are attributable to extraneous factors. The positive developments that seem to be coalescing into a glow on the economic horizon include:

• The revival of stalled projects.
   
• A reduction in raw material costs, with oil prices now well under $90 a barrel.
   
• Significant investments from Japan's SoftBank in Snapdeal and Ola; other significant investments and announcements in e-commerce, for example, Flipkart and Amazon.
   
• The implementation of electronic toll collection (ETC) on our highways. Introduced between Ahmedabad and Vadodara on National Highway 8 (NH-8) in 2013, the ETC became available last week between Delhi and Mumbai on NH-8. It is expected to be available on all national highways in the next two months. Vehicles with prepaid tags can drive through without slowing down, whereas until now, all vehicles had to stop to pay tolls. The productivity gains will be enormous, with fuel savings across toll stations estimated at Rs 60,000 crore (see BS, October 30, 2014 and BS, October 31, 2014 for details).

But all is not entirely well. The fiscal deficit is at 80 per cent of what was budgeted for the full year; there was a decline in projects completed in the September quarter; and there is uncertainty about growth rates.

The real issue, though, is that major systemic flaws persist, resulting in growing economic and operating constraints. There are the problems of retrospective tax claims, of coal allocation and of spectrum allocation. In the societal dimension, there are continuing indications of disharmony, resulting in wariness and insecurity about whether we have a unifying or divisive top leadership, let alone rank and file. Proceeding with business as usual with the present ineffective ways will lead to continuing and increasingly overwhelming detrimental effects. Each of these areas needs breakthroughs to achieve convergent, synergistic results.

Coal

Over 60 per cent of stalled projects tracked by the Performance Management Group in the Cabinet secretariat are power projects, held up because coal is not available. Coal-mining rights are to be auctioned on the lines of spectrum. What are the likely outcomes?

While the government was jubilant about funds collected from the auctions, this created enormous capital and operating constraints for the communications sector. This is because the Rs 1.05 lakh crore bid for spectrum became unavailable for network construction and operations, and the limited bandwidth available to each operator adds to costs and restricts delivery capability. Growth in network capacity has deteriorated to the point where we have higher levels of dropped calls in metros, with continuing poor broadband access countrywide. The effects on productivity are ruinous.

What can we expect from mining rights auctions? If the results are as for the spectrum auctions, we'll have high treasury collections, high life-cycle project costs affecting critical inputs like electricity, steel and aluminium, and a reduction in investment in mining operations and downstream manufacturing. These are logical outcomes: the consequence of higher costs is either higher prices, or financial under-recovery leading to collapse, and capital used for auctions is unavailable for investment. Instead, what we really want from the mining allocation is inexpensive electricity and efficient production of industrial materials, such as steel and aluminium.

The financial insolvency of our state electricity boards reflects the magnitude of the problem. Even the story of Gujarat's electricity distribution raises questions for the rest: Gujarat's average farm tariff is under Rs 1 a unit, compared with a non-farm tariff of Rs 4-5 (see "Farmers pay 56 paise per unit of electricity"*). The high cost of providing these connections is unviable with the low revenue of 56 paise a unit. This is why there is a backlog of about 400,000 farmers waiting for connections despite Gujarat's "surplus" of over 2,000 megawatts. Distributing electricity at such low rates is simply unsustainable, and the situation is much worse in states providing free electricity.

A possible way to approach this is to appoint two or three individuals with the integrity and competence to work with the government, industry and experts to develop an allocation plan. If this "beauty-parade" approach seems too utopian or academic for India, please be aware that this is precisely how land acquisition was actually done for the Calcutta Metro around 1982 after years of delay, and for part of the Bangalore Metro in 2006.

Spectrum

The spectrum constraints, meanwhile, show in the high levels of dropped calls because of congested lines, and the slow rollout of networks into rural areas. This slowness is because of the unfavourable economics: of high cost and difficult execution, with lower revenue potential. What we want from spectrum allocation is access to broadband networks at prices that will result in productivity gains. Instead, we have neither adequate broadband networks, nor sufficiently widespread access for productivity. A better solution is pooled networks with mandatory shared access on payment, with the government getting a share of revenues.

Ecosystems

Apart from inadequate infrastructure, logistics, finance and regulations, all of which must be well-orchestrated to achieve supportive ecosystems for investment and operations, the tax-claims fallout continues to undermine growth prospects. While the Vodafone problem may be finally resolved, the closure of Nokia's manufacturing facility in Chennai because of tax claims undercuts all the sales talk. Each sector needs a supportive ecosystem, integrated with the rest.

Social Disharmony

Above all, social disharmony seriously affects our capacity for collective action. Social coherence is essential for constructive development. The leadership's effectiveness in reaching out and inspiring constructive aspirations can help to harmonise and channel citizens towards desirable common goals. Such collective initiatives would reduce our fractiousness and infighting, making win-win outcomes more possible.

The solutions in all these areas need to be path-breaking, based on integrity, trust and bold, collaborative action. We have to learn these ways.

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                                                                              Shyam (nospace) Ponappa at gmail dot com

*http://indianexpress.com/article/cities/ahmedabad/farmers-pay-56-paise-per-unit-of-electricity/

Comments (2):

• karthikeyan
  Tax Havens can be created , for NOKIA alikes ?? :)
  06-11-2014 08:22:27 
• 
  ashok
  The state of the power sector can make or break Make In India. Worthy of attention at the highest levels of government. 2. Whether spectrum or coal, the government can meet the industry half way by taking its entitlement as a revenue stream rather than an initial lump of capital.
  05-11-2014 22:45:12

Big-Bang Budgets?

Clarity of planning and conceptualisation needs to be the hallmark of policy planning for the Budget

A good holding action in the face of turbulence is a real achievement. It’s a tremendous relief, with a positive spin. That’s what the finance minister seems to have given us with this year’s Budget. So, the glass could well turn out to be half-full, if heaven plays its part, and the demons — for example, rising oil prices because of turmoil in the Arab world — are in abeyance. For now, India’s spirits are up, and we have a shot at getting on with it. And if we don’t, heaven forefend, the government could resort to something as irresponsible as another spectrum auction (2.5 GHz for 4G/LTE) to pull itself out of the morass.

Given this reprieve, how best can we capitalise on it? Some of us have this notion that it is a tradition that major projects or schemes are announced at the time of the Budget. Is this a good way for the government to proceed? Are there better ways, and if so, what might they be? Also, after the Budget, several opinions reflected disappointment with the lack of big moves. What sort of actions would deserve the “Big Move” label?

Ignoring for the time being the FM’s statements about bills for banking, insurance and pension funds that could add up to a big bang, there was in fact a Big Move, with the ground prepared well beforehand, as it should be: the proposed cash transfer of Rs 37,000 crore allocated for kerosene, LPG and fertilisers to BPL users. This move to cash transfers will be a major change that should be for the better, despite apparent misgivings from the Left. In fact, its effect should be much more than an equivalent allocation in the previous system, with its infamous leakages. The logical extension of this process would be smart-card purchases of specified products with designated limits from any retailer, with direct rebates from the government in a single transaction. No forms, no fuss, thanks to the Unique Identification Number (UID). Next could be food subsidies of over Rs 74,000 crore through smart cards.

In this time of drift over several years, there has been an apparent lack of visible leadership until the appointment of a new telecom minister after the destabilisation of the past few months. This was followed by the prime minister’s assertive statements in both houses of Parliament. Similarly, the UID thrust and the first step with cash transfers show that the government can indeed take well planned initiatives. Here we have a set of steps taken with clear objectives (although somewhat muddled in the telling), with plans being developed and executed with what we hope will manifest as high quality, on time and within Budget. So it’s possible, although not our usual practice. If only we could get more of this assertive leadership to good ends.

Imagine if we brought the same clarity of objectives and conceptualisation to, say, addressing the supply of energy to end users. True, this is a very difficult area because of the multiple challenges across several ministries/agencies (fuel production and distribution, transportation, power generation, transmission, distribution, pricing, state electricity boards), and our habitual malpractices as users. The approach, however, would presumably be the same as for the UID. We would start with clear objectives that are coherent, ie, not disjointed or contradictory, and undertake a systematic, multidisciplinary effort — no ivory tower geniuses — to plan and execute through a process of sound project management to achieve the desired results. This would be an end-to-end effort that would have little to do with the budget except for the annual announcement of financial allocations, once the activities and resource requirements are specified. Its fundamental characteristic would be that it would have to be an integrated systems approach to get results.

Most important are well planned, convergent, goal-directed activities. Whether for food storage, anganwadis, power, roads, railways, integrated energy and transport programs, or communications and broadband, the process flow needs to be defined thoroughly, and every aspect specified for our environment in the implementation plan. This process would improve the odds of achieving the objectives. For instance, if cold stores are not meshed with production and markets, or transport linkages are deficient, chances are that they will fail.

The process could begin at any time of the year, and not necessarily announced at budget time in the annual cycle. Once the initial approach is conceptualised and the initiative launched, the programme plans would be scoped and spelt out, and the budget estimation completed. At budget time, as with the cash transfers linked to the UID, there would be an allocation of funds for the activities in the next 12-month phase.

Now to the Railway budget: the much touted Railways desperately need rehabilitation. In view of the significant multiplier effect that the Railways have on many other sectors, the government really must reassert its leadership in the next couple of months (after the West Bengal elections?), and reclaim this crucial area of transportation. The urgent need is to reverse the atrophy over recent years, as well as to begin to build for the future, as for instance China has done, with trains that take passengers over 1,000 km in three hours.*

Shepherd Zhou/European Pressphoto Agency

A bullet train in China travels 664 miles, from a southern coastal town deep into the interior.*

New York Times

To conclude, it is time the government took one infrastructure sector or programme at a time, including education/vocational education/continuing education, and developed clear, goal-driven plans to provide the framework for the next budget session.

* 'China Sees Growth Engine in a Web of Fast Trains', Keith Bradsher, New York Times, February 12, 2010:

http://www.nytimes.com/2010/02/13/business/global/13rail.html

*

shyamponappa@gmail.com

Organization By The Judiciary?

Dispute Resolution & India's Body Politic

Shyam Ponappa / November 03, 2005

A good way to ruin India’s potential of achieving the BRIC forecasts (Brazil, Russia, India, and China as leading economies by 2050) is to indulge in a raucous fracas about the new airport at Bangalore. Surely the Janata Dal (S) knows this. Could it be a conscious strategy to make Karnataka like Bihar? Let us hope not, because that could be a horribly effective strategy. Even before this, Reuters reported a BPO entrepreneur in China saying: “We ask our clients to go to India first and then fly to Shenzhen … Because the minute you land in Shenzhen you can see the environment is much better.”

For the beleaguered denizens of India, few things bode more ill. We must think of drastic ways of building systems in India that work for its citizens, as the executive and legislature do not seem able to do so.

I wonder if people wish, as I do, for more assertive spontaneous action by our justice system (suo motu initiatives). Worse, I am inclined to urge abetment in this process if it is legally feasible, despite reservations such as an unwillingness to recommend foreign investment in projects that would leave them at its mercy.

Could it be in the public interest to invite judicial intervention in India as an interim measure? If so, should people take to “adjudication support” activities? I am suggesting a variant on assistance to litigants (“litigation support” or “dispute resolution”). The twist: on select matters, present the facts and logic that courts can use for spontaneous action in the public interest. That is, prepare the argument as though to file public interest litigation (PIL), but do it only to invite judiciary action, and let the courts decide on priorities and “prosecution”. It could be used for problem solving, as with the Bangalore airport and infrastructure; or for systems development, as in creating a fair and effective policy and administrative framework for telecommunications, or for energy. Most ambitiously, the judiciary could curb political excesses through incitement to religious or ethnic bias, i.e. transgressions of Article 15 of the Constitution, whether for a particular community such as the Vokkaligas or Yadavs, or against any or all others.

Reasons

While there is little doubt of India’s increasing prosperity, there are too few developments of systems for the public good, despite a stellar cast at the helm. With a large population, poor infrastructure, atrocious systems, and a predatory, self-seeking culture dominating politics and society, where the educated and prosperous behave irresponsibly, we desperately need systems for the public good.

Few of us can dedicate the effort and money it would take to prepare a case, file a PIL, and follow it to conclusion. But many can contribute evidence on things that would harm our collective interests, provided this is channelled with systemic support.

With an overburdened justice system, more PIL suits are avoidable. Therefore, even as our judiciary hews into the backlog, and oversees the design and execution of a document and case management system with processes to improve throughput (which they are doing), providing them with good information support could help them decide where to focus with regard to judicial activism.

Systems Building: A start

It is customary for the judiciary to evaluate opposing arguments and then decide, calling on domain expertise as required. This integrated, multidisciplinary approach is essential for systems development, and yet seems to be lacking in our executive’s and legislature’s approach.

Also, the judiciary probably appreciates the complex web of aims -- objectives, policies, laws, rules and regulations, procedures, institutions, practices that comprise good systems -- which collectively make for a sound policy framework. Hence, they could compel the induction of (a) integrated expertise, and (b) socio-technical systems inputs, such as the work at the Next Generation Infrastructures Foundation (http://www.nginfra.nl/) for a sector.

Although beyond the customary ambit of the judiciary, whose purpose is not the development of new systems and institutions, this approach abides by democratic processes.

Bangalore Airport/Infrastructure: Rights & Responsibilities in Politics

Bangalore symbolises much more than the city. The Bangalore airport and infrastructure in Karnataka (with an equally egregious example from Bihar, perhaps? Or from UP? Or?) could serve as an exemplary case. While the airport is the flashpoint, there are other ramifications, e.g. the smear against Infosys (hence the issue of inappropriate ways to pursue political ends, when the judiciary could step in to temper rights with obligations), the efforts to stall the Bangalore-Mysore Expressway and to prevent its servicing the airport (also an issue of inappropriate political action). Tirades against NR Narayana Murthy and Infosys and undermining infrastructure initiatives damage our collective reputation and potential, not just the individual, corporation, or community.

Our collective interests are damaged in a similar manner by gambits like:

- the Ayodhya temple movement,
the strategic populism of the Congress, like giving away “free” electricity and blighting the prospects for reform well beyond their limited tenure and the extent of their territory (because such actions create a negative perception of India itself),
abdication of responsibility by state and local authorities,
the Left’s misrepresentation of confrontational trade unionism as employee rights in IT and BPO enterprises, whereas both employee and employer rights may be better served by models such the Dutch works councils (http://ideas.repec.org/p/use/tkiwps/0306.html).

A well-designed facilitation system could be organised that plays to a burgeoning IT nation in building our internal systems and markets, e.g. by a platform and access on the web, incorporating elements of the UK’s government-sponsored MySociety.org’s project, TheyWorkForYou.com (a non-partisan, volunteer-run web site that helps people track elected representatives). This could enable effective use of the Right to Information Act, with innovations like wiki and Google Maps Mash-ups, and specifically designed features to help the judiciary rate, prioritise, and track issues. It could also make for channelling participation from multiple sources with a loosely structured advisory panel, with the likes of Aruna Roy’s Mazdoor Kisan Shakti Sanghatan (the MKSS started the Right To Information movement in Rajasthan), Janaagraha with its public disclosure system in Bangalore set up by the Ramanathans, Bunker Roy’s Social Welfare and Research Centre of Tilonia with its original focus on water, Bibek Debroy’s work rationalising the laws (Project LARGE), Parivartan in New Delhi (e.g., Vishal’s experience with Vasant Kunj potholes: see http://vishallucknow.blogspot.com/) and its associates in other centres, the Bangalore Agenda Task Force, and the Bangalore IT Forum.

It will undoubtedly be a challenge to emphasise a rational, constructive, knowledge-based, convergent approach (i.e., integrating the respective domains, whether it is engineering, finance, law, organisation design, etc. and keeping them objective and task-oriented). Over time, this could evolve into governance mechanisms in the form of workable public-private partnerships. The key will be to focus on achieving results, stressing logic, systems, and technology. In fact, the judiciary will need to protect the whole initiative from being hijacked by opportunistic self-seekers, the shrill rhetoric of the antidevelopment brigade, and such like.


Shyam Ponappa

Thinking Big: Scale, Ownership & Results

Shyam Ponappa / October 06, 2005

We'd do well to borrow from the Dutch model of public-private partnership

If we look at infrastructure systems, we find there are different ways to achieve good results. Today’s mantra is that privatisation makes for good outcomes. Do we really think privatisation can cure all our ills? Or is it just a management and/or financial fad? Let us consider some examples to see the effects of scale and ownership associated with good results.

Their experience suggests that the urge to privatise per se may be misplaced. Their focus is on integrated aims and objectives, with organisation and systems to keep people on track and deliver results, unfettered by ideologies such as private or public ownership, or the curse of fragmented efforts. Holding back in scale is like regressing to the licence-permit raj.

Consider two very different examples, China and the Netherlands. The common features we find are that:

1. Scale is essential for results.

2. Ownership is less relevant than a combination of aims, organisation, and result-oriented execution.

3. Integrated, well-managed systems that reflect reality have good outcomes. Economics, technology and management (organisation, finance, project management) combine to drive results. There is no wishful thinking such as giving away free electricity, which misuses resources and undercuts good economics.

Scale & Effectiveness

For a variety of reasons, we do even large projects in a fragmented way. The national roads project/s, for instance, is awarded in tiny pieces. When the building of the Bangalore-Mysore Highway was announced in the 1990s, the head of a major US engineering-and-construction company in India asked to see the area, as their strengths included highway construction.

His conclusion was that the projects awarded would have to be far larger to justify his company’s participation. The reason: it would cost too much to bring in the heavy equipment required, and then move the machines around for small contracts, idling them between jobs.

China: For scale, ownership, and effectiveness, look at divergent ways the Chinese and the Dutch go about it. China, with its top-down approach and public ownership, has manifest proof of performance in infrastructure. Enough said.

The Dutch experience: What of the Netherlands? Here is a small nation (pop: 16 million), with monumental projects—their dykes and surge barriers, such as the 32-km Afsluitdijk in the north (see http://www.rdij.nl/rdij/ijsselmeergebied/afsluitdijk/index_uk.htm) and the Delta Project in the south (http://en.wikipedia.org/wiki/Delta_Works), are truly noteworthy; they also have excellent infrastructure.

Schiphol airport got 42 million passengers in 2004; Rotterdam port handles over 50 per cent of EU imports. For years, Schiphol has been considered among the best airports, with highly rated facilities. While it does not quite exude the Asian luxe flair of Singapore’s Changi, nor the sleek elegance of Copenhagen’s Kastrup, it is highly functional in a forthright way.

This, combined with Dutch enterprise in running the airline hub for KLM, explains those 42 million passengers who went through Schiphol last year, compared with 30 million for Changi, 37 million for Hong Kong, 38 million for Bangkok, or 37 million for New York’s JFK.

Conclusion I—Ownership is irrelevant

The Schiphol group owns a number of airports in the country and abroad. It is owned by the Dutch government (75.8 per cent), the City of Amsterdam (21.8 per cent), and the City of Rotterdam (2.4 per cent). State ownership has been an oft-debated-but-not-yet-resolved feature since the 1990s.

Conclusion II—Grassroots collaboration around water

The Netherlands is impressive for its sheer collaborative organisation, quite different from a top-down approach. This began almost a thousand years ago, with their water management. Their district water boards are like local councils. Dating from the 12th century, they are among the world’s oldest-functioning democratic entities.

The Dutch treat water management as a complex issue, recognising that many aspects of life have an inseparable water component. Therefore, public and private collaboration enables people to live with water, rather than to fight it. By building a system with zero tolerance, issues are resolved within the system without the risk of personality (or “caste”, however you describe it, or whatever other label you substitute for it) conflicts.

Conclusion III—Unitary organisation

A single ministry of transport, public works, and water management covers shipping, rail, civil aviation, as well as roads and all aspects of water usage: drinking water, irrigation, inland waterways and ports. Another surprising fact: there were 2,700 water boards in 1940; these have been streamlined down to 37.

Their pragmatism helps. Accepting that people will look for free rides on collective goods, this bastion of individual freedom uses systems with tough penalties to ensure a public-private partnership to sustain collective goods, and resolve issues in the public interest.

Works Councils—‘The Reformation’ for Employees

Their unique concept of “works councils” is the collaborative approach extended to employee organisations. The legislation from the 1970s is a prime example of their ability to build institutions to suit evolving needs.

The works council is a body open to all employees in a company. It must be consulted by the board before significant decisions, and it can go to court. Resolution and convergence are aided by the practice of open debate and consensus before decision making, known as the Polder Model (a polder being a piece of reclaimed land surrounded by water and protected by dykes, and all residents being stakeholders).

The Dutch themselves sometimes deride their slow processes, but from a management perspective, this is an organiser’s heaven. Their institutions help people agree on aims, commit themselves to agreements, and maintain and adapt the rules over time and to changing circumstances.

Summing up—Organise for Results

The fact is that in both China (despite its power shortages) and the Netherlands, different forms of effective organisation with public ownership or public-private partnerships operate on a scale that produces the bijli-sadak-pani paradise we seek.

We cannot transplant Polder Politics to India any more than we can transplant China’s monolithic pursuit of infrastructure. But we can learn from them, just as others have applied elements of our successes (e.g. handicrafts organisations in Bangladesh and Thailand, or Air-India’s early training to Singapore Airlines).

Of particular relevance to us is scale independent of ownership, with systematic organisation, including public-private partnerships. This should help us build systems that work and endure, bringing order to our higgledy-piggledy progression.

It comes down to the quality of results, i.e. like Deng Xiaoping’s cat, it must catch mice.


Shyam Ponappa