The long and winding road
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30/01/2005
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Business World (Kolkata)
The chaos on the roads is choking the growth of India's IT capital, Bangalore
You just cannot build a competitive economy with pot-holed roads, erratic power supply, choked ports, dirty cities and thirsty villages. It is a bit like batting on a bad wicket: you may be good, but the pitch lets you down. India's physical infrastructure is an unholy mess. At any given time, up to a quarter of our national and state highways are in a logjam; trucks and buses crawl at average speeds of 25 kilometres per hour (kmph) as against the world average of 50 kmph. Most ports are handling traffic way above their capacities; port congestion at the Nhava Sheva container terminal, India's most efficient, privately-operated terminal, has reduced foreign trade by around Rs 5,000 crore this year. The two main international airports, Mumbai and New Delhi, are in desperate need of reconditioning. Less than a third of the country's billion people have access to proper sanitation.
Meanwhile, look at what is happening around the rest of Asia. The Changi Airport at Singapore, built over two decades ago, handles more passengers than all Indian airports put together. The 70-km dual-carriage expressway that connects the international airport at Kuala Lumpur to the city, built a few years ago, allows cars to cruise at average speeds of 90 kmph.
The Hong Kong airport is connected to the city by the world's longest suspension bridge, bigger than San Francisco's Golden Gate Bridge. Within the city, there is a web of quality double-carriage roads, at times crossing each other at three or four different levels. Hong Kong and Singapore have two of the busiest ports, with the largest and most efficient container terminals in the world. Far more trade is conducted through these two ports than all our ports put together. And almost all of India's exports are trans-shipped through the Colombo port in Sri Lanka.
Notice that we haven't even mentioned China and its frenetic quest to build roads, dams, telecom networks and power plants.
The political class seems to have finally woken up from its slumber. Atal Bihari Vajpayee's ambitious Golden Quadrilateral Project showed how imaginatively funded and efficiently managed public investment can succeed. The new telecom policy of 1999 showed how investor-friendly regulations can kick-start investment. These past five years have seen the first serious attempt to build infrastructure, after the optimism-laden Nehruvian era. But far more needs to be done.
The current government, too, seems serious about the need to build world-class infrastructure over the next decade or so. What will it cost? Prime Minister Manmohan Singh told a gathering of American CEOs in New York that India would need $150 billion of foreign investment in infrastructure over the next decade. A government committee has been constituted to figure out how much money is needed to build high-quality physical infrastructure. It will submit its report in April.
Businessworld estimates that India will need around Rs 2,760,000 crore of infrastructure investment over the next ten years. That's a mind-boggling number. But this survey