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The long and bumpy road to business
in India
By Raja M
MUMBAI - O P Vaishnav is a happier man.
As general manager in a large transport
company, India's rickety roads have given him
operational headaches for 18 years. On March 21,
Vaishnav heard Indian Prime Minister Manmohan
Singh announce that most of future road-development
projects would be on a BOT (build, operate and
transfer) basis. "We need it," said Vaishnav.
"Better roads could fuel a 20-35% growth in the
transport industry, and that impacts all-around
growth."
Manmohan agreed. According to the
prime minister, better roads will be a fundamental
need for India's targeted economic growth of 7-8%
in the next few years. Manmohan said road development
would continue to involve the private sector -
domestic as well as foreign companies.
So far, India's road woes have defied logic.
Both urban and national highways, a
basic infrastructure need, had been left out of
urgent focus while the country talked about
achieving economic superpower status. India's road
network, the third-largest in the world and covering
3 million kilometers, is a minor miracle on
the move. According to the National Highway
Authority of India (NHAI), highways form a tiny 2% of
the entire road network but carry more than 40% of traffic.
Rail transport is entirely
in the government's hands and the private
sector operates cargo road transport. An estimated
1.2 million trucks daily roar across 80,000km
of Indian plains, mountains and plateaus.
Vaishnav's employer, Travel Corp of India (TCI),
calls itself "Asia's largest road-transport company",
and handles more than 5.5 million tons of cargo
annually - running 3,000 trucks and 15,000
consignment daily. The annual road-transport market
is gauged to be worth about US$95 million, but
could increase to more than $125 million if road
conditions improve, says the transport industry.
India's bumpy, potholed roads are a
regular source of dismay and embarrassment to
industry bigwigs hosting foreign guests used to
seeing better infrastructure in other leading
Asian nations, which is not perfect itself. A new
Asian Development Bank study says China and East
Asian countries will have to invest $1 trillion in
the next five years on infrastructure to cope with
growing economies and populations.
"In
order to continue the growth trend, East Asian
countries must keep up with the demands of
companies that need energy, reliable
transportation links and other services," said
Japan Bank for International Cooperation governor
Kyosuke Shinozawa in a recent media statement. The
study, covering 21 countries in Asia-Pacific,
including China, Thailand, Malaysia, Myanmar and
Mongolia, involved the Asian Development Bank, the
World Bank and Japan Bank. All three banks said
they would consider giving more funds to
infrastructure projects. If the roads in these
countries need help, one shudders to think what
kind of money Indian roads would require.
The core of India's road
network revolves around the Golden Quadrilateral, a
5,846km highway linking the major metropolitan cities
of New Delhi, Mumbai, Chennai and Kolkata. The
Indian government had announced that the National
Highway Development Program Phase III to upgrade
10,000km by 2012 would be undertaken on a BOT
basis. Of the total cost of $12.5 billion, about
$6.9 billion is expected from private funding.
Not all of Indian industry is twiddling
thumbs waiting for governmental action, though.
For instance, in the southern Indian boomtown of
Coimbatore, the local wing of the Confederation of
Indian Industry pushed the Tamil Nadu Road
Development Corp to study ways to decongest
a nearby arterial road.
Far worse
pressure is building up within major Indian cities.
While inner-city traffic has already become a nightmare,
India's domestic auto industry grew by 16.1% this
year, selling 7,173,309 units in April-February
against 6,175,285 in 2004. India has thus become
the fastest-growing car bazaar in the world,
overtaking China. Goldman Sachs has predicted that
India will have the largest number of cars by
2050. By then, every sixth car sold in the world
will be sold in India. Worse, the Tata Group,
India's most respected industrial house, is
planning a $2,200 car that, whenever out, will
only multiply the congestion. But India's auto
industry is almost oblivious of the need to lobby
the government to pay more attention to roads.
With dropping car prices, rising incomes
and multiplying car populations in major Indian
cities, vehicle users have begun to suffer serious
injuries caused by potholes, while precious
man-hours and tempers are lost in commuting bad
roads, particularly during the monsoon months.
Fortunately, along with proactive sections of
industry, some urban residents are cracking the
whip themselves.
Residents
of Bandra, a prosperous suburb in Mumbai, were so
fed up with corrupt road contractors that
they decided to monitor public road
projects themselves. The government's low priority to roads
is evident even in major projects such as the
eight-lane sea-link Bandra-Worli Seaface project worth
$298.5 million. Some 150 workers toiling for more than 10 hours
daily on the sea road have not been paid their
$35-monthly wages for two months, even as the state
government has made arrangements to buy Skoda cars
for its ministers.
Transporters say
there has been a major shift in transportation mode
from railways toward roads. Indian roads carry 85%
of passenger and 70% of freight traffic. But
adding to the misery of inadequately maintained
roads, wearying formalities, taxes and corruption
make life hell for millions of Indian truck
drivers. Jason Taylor, a human-rights photographer,
experienced the suffering by spending three months
riding with truck drivers on Indian highways.
"Horrendous journeys," Taylor told the
UK-based International Development Magazine,
"sitting on a wooden bench covered with just a bit
of foam and traveling across the worst roads
you've ever seen. No seat belts, no airbags. I was
on one truck that had no brakes. We almost crashed
twice." He saw drivers catch 15 minutes of sleep
after driving for 12 hours. Maybe India's
ministers ought to take a similar ride before
splurging on Skodas.
(Copyright 2005 Asia
Times Online Ltd. All rights reserved. Please
contact us for information on sales, syndication and republishing.) |
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