Podcast category: Infrastructure

drupal-admin    14/03/2011
Podcast category: Infrastructure

Setting up Railway Networks goes back to British Rule in India.  In those days Railways were setup more for moving their goods across India. English people set up Broad Guage, Meter Guage and Narrow Gauge Lines.

Post independence, India has slowed down the laying of Railway Tracks but number of trains and commercial goods movement has increased.  Most of the development of tracks is in Broad Guage category.

Most of you would also have seen Trains running on Narrow/Meter Guage tracks. If they are passenger trains, you would have seen that almost that there is 70% vacancy in them.  And in these tracks there are hardly any goods movement. Now look at the costs of managing these tracks, trains:

1)      Train  Driver Salaries

2)      Railway Crossing Personnel  Salaries (90% of the time they are idle)

3)      Maintenance Contractors to maintain these tracks

4)      Station Masters, Peons, Ticketing Personnel, Station Cleaners etc

5)      Tracking/Signal Managers

There are tracks where only 2 passenger trains run(1 in  morning and 1 in evening) in entire day and nothing else.  These trains have only 10 travelers.  If they spend on average Rs. 50 per one side. You are looking at Rs. 1000 daily revenue from this (Rs. 30,000 per month).  Suppose there are 7 Stations(5 people at each station including station master, ticketing guy, etc), 15 Railway Crossings (1 person each), Maintenance Contractors(4 overall for the line),  4 Signal Managers, 1 Driver and Guard for the train. Suppose each have average salary of Rs. 5000 per month, you are looking at Rs. 3,00,000 expenses min per month. Plus costs to run the train i.e fuel, maintenance of engines, coaches, etc plus pension allocation, etc. Monthly expenses will easily cross over Rs. 5 Lakhs with income around just Rs. 30,000.

While everyone is working hard day-in day-out, this is waste of taxpayers money. Who would run a business if it has such financials/cash-flow?  Shouldn’t government stop these trains and convert these tracks in roadways ?

Poll :

Shall Narrow Guage/Meter Guage lines be removed and replaced with Roadways?

drupal-admin    27/12/2010
Podcast category: Infrastructure

We use electricity in our daily lives and surely we have to pay the usage costs for what we consume.   Gujarat has been boasting itself as power surplus state and a business friendly state.  Let us delve into electricity costs in Gujarat.

Torrent Power Ahmedabad electricity bill has following components:

a)      Energy Charges

b)      FPPPA charges ( Fuel Additional Charge)

c)       Fixed Charges

d)      Govt duty

e)      Meter Rent

Lets look at few obvious things first.  Note that electricity bill comes once in two months, so monthly charges have to be calculated accordingly.

 I’ll start with meter rent i.e part e) of the bill. Why are we charged Rs. 30 meter rent every month? Can we own the meter and pay lump sum amount? What kind of maintenance are they doing if they are charging the rent? In 20 years every household pays Rs. 7,200 towards meter rent.  Even annual cost of Rs. 360 is too high!!!

Moving  to part c) Fixed Charge – Rs. 15/mo. What is this for and how is it distributed between power generation, transmission and distribution?

Now comes the real crux. Energy charges part a) – What is this charge.  If power generation costs Rs. 1.20 per unit, why are we charging Rs. 3+ to Residential customers and Rs. 7+ to commercial customers? How is this charge distributed between power generation, transmission and distribution?. If we are a power surplus state then our energy charges should be low because we are transmitting it locally in state – isn’t it?

Moving to  part b) FPPPA charges ( Fuel Additional Charge) . What is fuel charge? My understanding is that it is shifting the burden of high fuel cost on the consumers for coal, gas and furnace oil. Hmm.. but if we are having lot of electricity generated via hydro and wind energy why do we pay so much of FPPPA charge?   We absolutely need full particulars of the amount collected by way of surcharge on power tariffs.

Finally it doesn’t make sense at all when government charges 20% (residential) to 25%(commercial) duty on a) + b) + c). Why 20%? Where does this funds go?  Again this duty is one of the highest in India. If Gujarat is Power Surplus state and has Business Friendly government,  these high rates doesn’t make sense.  Why not charge other states for what we export to them and keep costs in Gujarat low?  Telling people stories of Vibrant Gujarat on one hand and ripping off Gujarat’s population on other hand does not make sense.

Poll Question:

Which is most important reason we pay huge electricity costs despite hydro, wind power generation and having surplus?

drupal-admin    20/12/2010
Podcast category: Infrastructure

As Gujarat continues to excel as economy powerhouse, we need to create a logo of our Made in Gujarat brand and promote it. Years ago, we saw an huge outflow of students from Gujarat to other states for higher education. As a result of this, our money started flowing to other states and helping their economy. Gujarat State government realized this - and in last few years we have got many new higher educational institutions come up in various regions of Gujarat.

We need to take this further. Why can't we create a "Made in Gujarat" brand label with logo and get all Gujarat registered companies on board - to use this in labels and in their marketing materials?. If done right, in few years from now, this will create a major impact on our state's economy as Gujarati community in India and outside will not only start buying Gujarat State products with pride but this will also help in promoting Brand Gujarat as a state that always is several notches up in business processes, practices and entrepreneurship environment compared to other states.

Gujarati community is known for its entrepreneurial spirits and Made in Gujarat brand and a common directory which is funded, managed and promoted by Gujarat Government is the need of today.

I had a chance to speak with Chirag Patel who was a faculty at Nirma and currently is in Canada. Chirag echoed the same Gujarati sentiment and stated that "If I would see something like Made in Gujarat on any brand in an Indian store here in Canada, and that too with clear eye catching visibility, I will be more inclined to buy it. I know it will help Gujarat state economy".

Nilaykumar  Parikh works as procurement manager in Supernova Genset Limited Ahmedabad. He did not come across any such directory that could be used by procurement people to do sourcing of their needs from only Gujarati owned small businesses. "Such a directory would certainly be helpful to me and government should attempt to make one" - said Nilay Parikh.

Poll Question:

What is the main reason we do not have "Made in Gujarat" branding?

drupal-admin    09/12/2010
Podcast category: Infrastructure

Having more access to international flights is a larger issue for Gujarat government especially considering the slow progress in promoting aviation sector related changes in Gujarat. There were talks about new Airport at Federa - approx 85 kms from Ahmedabad as being India's largest airport. AAI gave green signal http://timesofindia.indiatimes.com/city/ahmedabad/Federa-airport-gets-AA...  but since then it seems that all the efforts of last 4 years have not headed anywhere and there were other news in media stating that the project has run into issues. There is not much information shared on the project status by  Dholera SIR government authorities .  As we get ready for Vibrant Gujarat 2011 summit, having clarity on roadmap to improve airline industry in Gujarat is very much needed.

It is critical to our success as a favorable investment destination and Gandhinagar's unwillingness to push this hard will have negative impact in long run. We need to also work on open-skies policy related changes to allow smooth flow of air traffic (passenger and cargo) both in and out of Gujarat. While we are expecting representatives from 80 countries and many states of India in VGIS 2011,  let us hope that Gujarat government leaves no stone unturned to negotiate more air-traffic in Gujarat with these foreign diplomats. 

If we have clearly defined our trade and tourism objectives, we need the Federa Airport project to move on fast lane so we can expand and handle much much more capacities and people do not have to take multiple hops when trying to do business with Gujarat.

Poll Question:

What do you think is delaying the development of Federa Airport?

drupal-admin    09/12/2010
Podcast category: Infrastructure

AUDA and Gujarat government seem to be working day-in day-out carving out  a blueprint for future generation city  - Ahmedabad. In last few years, Ahmedabad boundaries have expanded and in few years surrounding towns like Gandhinagar, Sanand all will be gulped up by India's fastest growing mega city - Ahmedabad. Gujarat has accumulated lot of goodwill in India and overseas through development work and it should be taking advantage of this goodwill. Who could have imagined that Gujarat - after having devastating earthquake in 2001 can emerge as the fastest growing state in India with its economy growth at much much faster pace than that of China?

While we plan for new Ahmedabad, Government has lots of challenges ahead. One of the biggest challenge I think is to have a visionary who has seen the world. They need to clearly see the differences between Paris, New York, Los Angeles, Singapore and Shanghai and see what we need to learn, unlearn and re-learn and how to channelize government resources and manpower to build Ahmedabad of future.

Ahmedabad's priority is always to compete with Mumbai, Delhi or Bangalore. It is time to shift gears and compare Ahmedabad with Shanghai or Singapore and let us model our city starting here.

Poll Question:

What should we focus on to build Ahmedabad - city of future?