What is Islamic Finance? If Sharia prohibits lending of money based on interest, how will bankers survive?
This paradox disappears when you’re sitting on a pile of petrodollars. When you have financial assets of more than $500 million, expanding at 15-20%; when global banks vie with each other for your funds, you’d better take a closer look at Islamic Finance!
The religious view is that receiving high rates of interest on money lent to a poor debtor violated justice. Underlying this precept is the view that money was something that symbolized economic value and was significant only as a means of preserving that value. Therefore true value was preserved only if it was invested in real assets. So, under Islamic finance, transaction in real assets is based on sharing of profit and loss between the lenders and the borrowers.
This may sound Utopian fact is that there is a growing market for innovative instruments offered by Islamic finance. Some of them are –
Murabaha: Similar to installment sales contract
Istisna: A variation of Murabaha applied to housing loans
Ijara: Corresponds to a lease agreement
Musharaka: Similar to investment trust;
Takaful: A kind of casualty insurance covering capital transactions in banking, securities and insurance
Sukuk: ‘Islamic bonds’ mobilizing funds from a large number of investors
Thanks to these innovations, Malaysia now has the largest Islamic financial market in the world, surpassing Bahrain.
In the 1980s repatriation of petrodollars through the London market became a catalyst for the formation of the Eurodollar market. In 2004, FSA-UK starting pushing aggressively for repeat performance for a piece of the IF cake. Japan too is jumping into the fray using JBIC.
Restriction imposed after 9/11 have diverted money flows from USA to illiquid infra projects in the Persian Gulf through IF. Now the emerging market in India is attracting the attention of Islamic petrodollars...
I guess it all goes to prove yet again that IF there is a will, there is a way!
------------------------------------------------------------
Ref.: T. Maeda’s note – “A Strategic Approach to Islamic Finance”; JJ 10/07]
NOTE - 10th September 2008
According to the Economist (04 Sep. 2008), Islamic assets under management now stands at $700 billion. S&P thinks this could go up to $4 trillion. However, the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) has objected to Sukuk in its present form as it contravened Sharia principles. This could lead to problems...
Thursday, December 06, 2007
Monday, December 03, 2007
Interesting Excerpts -- Nanotech, Black Color
Nanotechnology: A little risky business (The Economist, Nov 22nd 2007)
In the past few years the number of consumer products claiming to use nanotechnology has dramatically grown—to almost 600 by one count....Some nanotechnology products are applied directly to the skin, as cosmetics and sunscreens. Titanium dioxide is commonly used as the white pigment in sunscreen. When it is ground into nanoparticles it can still block harmful ultraviolet radiation, but it allows visible light to pass straight though, which means modern sunscreens can appear completely transparent, while offering the same protection as the old white stuff.
Many products are now embedded with silver nanoparticles. At such small sizes, silver can have antimicrobial properties. Silver nanoparticles may come in handy wherever you want to kill germs—for instance, in things as diverse as children's dummies (comforters to Americans), teddy bears, washing machines, chopsticks and bed linen. Hence nanotechnology can be used in food production, most often as nanoparticles of silver in food-preparation equipment. The food industry is also trying to restructure ingredients at the nanoscale so as to include particles of trace metals in food supplements and to produce less-fattening foods.
Research on animals suggests that nanoparticles can even evade some of the body's natural defence systems and accumulate in the brain, cells, blood and nerves...Half of the atoms in a five-nanometre particle are on its surface, which can make it many times more toxic than expected by weight alone.
Carbon nanotubes have been used for years in industry. They have been embedded in materials like plastics to increase their toughness and provide electrical conductivity for components that are electrostatically painted. But it remains unknown, for instance, if they can enter groundwater when the products that contain them are dumped or broken up.
Painting it Black (Japan Journal, Oct., 2007)
For long, the color was a secret symbol of virility and power. Along with gold, it was the most favored color among warlords, the prime example being Oda Nobunaga (the first warlord to unify the nation), who refused to dine off anything but the blackest of lacquered tableware. In the fourteenth and fifteenth centuries women blackened their teeth, initially to emphasize their sexuality. Later, during the Edo period (1603–1867), wives dyed their teeth black as a sign of unavailability (a Japanese version of the wedding ring), though in many cases this served as the ultimate turn-on—much of Edo pornography (both art and literature) features black-teethed wives in the throes of ecstasy. Women drew the line when it came to dress however; black was too ceremonial, heavy, and laden with male aesthetics/subtexts.
The black boom of today has its roots in the revival of Japanese charcoal (sumi - 炭). Once the most ubiquitous of household supplies, Japanese charcoal (used not just for fuel but also for medication and as a purifier) had given way to mass-produced, high-tech products...
Sunday, December 02, 2007
Taxes and Domestic Airfares
In a few sectors Indian domestic airlines have been offering tickets for Rs. 5,. But even for the cheapest tickets, you actually end up paying more than Rs.2500 extra for taxes and surcharges. Now, what are these extra charges?
Jet fuel accounts for 40% of the operating costs for domestic airlines; the domestic industry spends about Rs.7543 Crore on fuel bills. With the latest hike, the additional costs/ticket is Rs. 2025/ and the break-up is something like this:
Fuel surcharge = Rs. 1650/-
Congestion surcharge = Rs. 150/-
Passenger service tax = Rs.225/-
Also aviation fuel is much more expensive in India - 70-90% higher than international rates. At Delhi it is Rs.47,444.14/kiloliter and at Mumbai it is Rs.49,061/kiloliter.
The Federation of Indian Airlines (FIA) estimates that the rates were brought closer to international rates, it would result in an annual saving of Rs.2496 Cr. ($624m).
Why the big difference?
.......................................................................................................................................
Source: P.R Sanjai, LiveMint, 1 Dec., 2007
Jet fuel accounts for 40% of the operating costs for domestic airlines; the domestic industry spends about Rs.7543 Crore on fuel bills. With the latest hike, the additional costs/ticket is Rs. 2025/ and the break-up is something like this:
Fuel surcharge = Rs. 1650/-
Congestion surcharge = Rs. 150/-
Passenger service tax = Rs.225/-
Also aviation fuel is much more expensive in India - 70-90% higher than international rates. At Delhi it is Rs.47,444.14/kiloliter and at Mumbai it is Rs.49,061/kiloliter.
The Federation of Indian Airlines (FIA) estimates that the rates were brought closer to international rates, it would result in an annual saving of Rs.2496 Cr. ($624m).
Why the big difference?
.......................................................................................................................................
Source: P.R Sanjai, LiveMint, 1 Dec., 2007
Wednesday, November 28, 2007
Diarrhea and Rang De Basanti
Today was the final evaluation of a bilateral initiative – the Project for Control of Diarrheal Diseases. The collaborative project had been launched in 1997 between the National Insitute of Cholera and Entreric Diseases (NICED) Kolkata and the International Medical Centre of Japan.
Now, ten years down the line, it was time to take a hard look at how the project had fared. An external evaluation team had completed its work and a presentation was organized at ICMR Delhi. The results were interesting – a two-hour session packed with data, PDMs, LogFrames, and somber speeches... interrupted every now and then by a peppy Rang-De-Basanti ringtone from the chairperson’s mobile phone.
The ringtone was irksome; completely out of place but it did not dilute the seriousness of the problem at hand.
Diarrhoeal diseases kill millions children in India every year – 35.4/1000 live births (Apr.2007) . It is the single largest cause of “infant mortality and morbidity in Third World Countries”. Since its victims are mostly brown and black kids living in third-world hovels, it naturally gets only a fraction of the money that goes for medical research.
WHO requires all countries to report data for only three diseases – cholera, plague and yellow-fever. Few actually do. But, of the three, it is cholera (and allied diarrheal diseases), that can easily be controlled through hygiene and sanitation. This is an embarrassing, inconvenient fact.
So embarrassing that many countries refuse to divulge data. Bangladesh perhaps loses more kids to cholera and enteric diseases than any other country but its officials like to pretend otherwise. Even Thailand too does not disclose data on diarrhea mortality fearing, perhaps, a negative impact on its booming tourism industry.
In India the data is patchy but it is there. More importantly, it is willing to do something about the problem and share whatever it learns. It is an open-mindedness that is born from the friendship of two researchers who met 40 years ago in Osaka, Japan.
Dr. Y. Takeda and Dr. N.K. Ganguly, met on an exchange programme and both grew to be formidable administrators and researchers in their respective countries. Persuading governments is a lot easier when you’re at the top, and that is exactly what Takeda and Ganguly as heads of IMC and ICMR respectively.
It has been a very productive friendship. Apart from sending scores of leading scientists, training hundreds of Indian counterparts and building an International Diarrheal Disease Research Centre at NICED (Rs.85 Cr., 1996), it has persuaded a large number of talented Indian researchers to stay back and seek solutions to a local.
But how to you measure success of a project like this?
A common symptom of diarrhea is “loosies” which, if left unattended, quickly dehydrates and kills children. But the causes are many –
* Bacteria (Vibrio cholerae, shigella, E.coli, aeromonas…over 2500 species)
* Viruses (Noro-virus, sapo, astro, rota, adeno, pico…over 400 types)
* Parasites (hookworm, ascaris, E.hystolytica, etc.,)
So the first step is to identify the buggers, and then to be ready with trained personnel and cures before a pandemic strikes again. This is exactly what NICED has been trying to do – identifying hundreds of strains (Etiology), producing anti-sera for each of them, archiving strains, and training hundreds of scientists.
The training helps create a surveillance network and producing the antisera locally helps save a lot of money – in the world market, 1ml costs about $200! Another measure is the impact of path-breaking medical research – over a 100 papers has been published since 1997.
On the whole, things seem to be on track. Now, if only the chairperson would switch the mobile into silent-mode...
Now, ten years down the line, it was time to take a hard look at how the project had fared. An external evaluation team had completed its work and a presentation was organized at ICMR Delhi. The results were interesting – a two-hour session packed with data, PDMs, LogFrames, and somber speeches... interrupted every now and then by a peppy Rang-De-Basanti ringtone from the chairperson’s mobile phone.
The ringtone was irksome; completely out of place but it did not dilute the seriousness of the problem at hand.
Diarrhoeal diseases kill millions children in India every year – 35.4/1000 live births (Apr.2007) . It is the single largest cause of “infant mortality and morbidity in Third World Countries”. Since its victims are mostly brown and black kids living in third-world hovels, it naturally gets only a fraction of the money that goes for medical research.
WHO requires all countries to report data for only three diseases – cholera, plague and yellow-fever. Few actually do. But, of the three, it is cholera (and allied diarrheal diseases), that can easily be controlled through hygiene and sanitation. This is an embarrassing, inconvenient fact.
So embarrassing that many countries refuse to divulge data. Bangladesh perhaps loses more kids to cholera and enteric diseases than any other country but its officials like to pretend otherwise. Even Thailand too does not disclose data on diarrhea mortality fearing, perhaps, a negative impact on its booming tourism industry.
In India the data is patchy but it is there. More importantly, it is willing to do something about the problem and share whatever it learns. It is an open-mindedness that is born from the friendship of two researchers who met 40 years ago in Osaka, Japan.
Dr. Y. Takeda and Dr. N.K. Ganguly, met on an exchange programme and both grew to be formidable administrators and researchers in their respective countries. Persuading governments is a lot easier when you’re at the top, and that is exactly what Takeda and Ganguly as heads of IMC and ICMR respectively.
It has been a very productive friendship. Apart from sending scores of leading scientists, training hundreds of Indian counterparts and building an International Diarrheal Disease Research Centre at NICED (Rs.85 Cr., 1996), it has persuaded a large number of talented Indian researchers to stay back and seek solutions to a local.
But how to you measure success of a project like this?
A common symptom of diarrhea is “loosies” which, if left unattended, quickly dehydrates and kills children. But the causes are many –
* Bacteria (Vibrio cholerae, shigella, E.coli, aeromonas…over 2500 species)
* Viruses (Noro-virus, sapo, astro, rota, adeno, pico…over 400 types)
* Parasites (hookworm, ascaris, E.hystolytica, etc.,)
So the first step is to identify the buggers, and then to be ready with trained personnel and cures before a pandemic strikes again. This is exactly what NICED has been trying to do – identifying hundreds of strains (Etiology), producing anti-sera for each of them, archiving strains, and training hundreds of scientists.
The training helps create a surveillance network and producing the antisera locally helps save a lot of money – in the world market, 1ml costs about $200! Another measure is the impact of path-breaking medical research – over a 100 papers has been published since 1997.
On the whole, things seem to be on track. Now, if only the chairperson would switch the mobile into silent-mode...
Tuesday, November 27, 2007
Thursday, November 22, 2007
Small Enterprises and Patronising Bureaucrats
"Put the boy and girl in the park and walk off -- whether they make it or not is not our business!"
This was Mr. Jawhar Sircar's take on government intervention in foreign collaborations for private enterprises. Mr. Sircar is the Additional Secretary and Development Commissioner Ministry of Micro, Small and Medium Enterprises (MSME), a flamboyant satrap who oversees an 'empire' of 13 million micro and small enterprises employing over 40 million people in India.
The numbers are deceptive, of course. The government has no direct control over the enterprises. Each MSME represents an entrepreneur struggling to survive amidst all sorts of constraints and often, the local government itself is one of the problems.
Infighting amongst government departments is another. MSME's turf is constantly usurped by DIPP, an arm of the Ministry of Commerce and Industry. Both claim to be patron saints of all small enterprises.
What are small enterprises? In terms of investment ceiling for plant, machinery or equipment (excluding land & building), the present definition of Micro, Small and Medium Enterprises is as follows:
Micro - >$62,000 (mfrg); >$25,000 (services)
Small - $ 60,000 - $1.25m (mfrg); $25,000- $0.5m (services)
Medium- $1.25m - $2.5m (mfrg); $0.5m - $ 1.25m (services)
By this new definition, MSM enterprises account for $33b+ in exports, 6% of GDP; 45% share of manufacturing output and 40% share of exports.
Annual credit flow to these enterprises is $9.5 billion from PSU banks; $ 3.5b from other banks (foreign, Sidbi, SFcs..) and $3b from 'Emerging Sources (VC/PE, ECBs, Factoring etc.,).
Given the socio-economic imperative presented by the numbers it is not surprising that we have full fledged government departments and ministries to support this section. But are they actually effective? How much do the government officers really know running small-scale enterprises? do they really care about the rough and tumble of cut-throat competition?... I have my doubts.
This was Mr. Jawhar Sircar's take on government intervention in foreign collaborations for private enterprises. Mr. Sircar is the Additional Secretary and Development Commissioner Ministry of Micro, Small and Medium Enterprises (MSME), a flamboyant satrap who oversees an 'empire' of 13 million micro and small enterprises employing over 40 million people in India.
The numbers are deceptive, of course. The government has no direct control over the enterprises. Each MSME represents an entrepreneur struggling to survive amidst all sorts of constraints and often, the local government itself is one of the problems.
Infighting amongst government departments is another. MSME's turf is constantly usurped by DIPP, an arm of the Ministry of Commerce and Industry. Both claim to be patron saints of all small enterprises.
What are small enterprises? In terms of investment ceiling for plant, machinery or equipment (excluding land & building), the present definition of Micro, Small and Medium Enterprises is as follows:
Micro - >$62,000 (mfrg); >$25,000 (services)
Small - $ 60,000 - $1.25m (mfrg); $25,000- $0.5m (services)
Medium- $1.25m - $2.5m (mfrg); $0.5m - $ 1.25m (services)
By this new definition, MSM enterprises account for $33b+ in exports, 6% of GDP; 45% share of manufacturing output and 40% share of exports.
Annual credit flow to these enterprises is $9.5 billion from PSU banks; $ 3.5b from other banks (foreign, Sidbi, SFcs..) and $3b from 'Emerging Sources (VC/PE, ECBs, Factoring etc.,).
Given the socio-economic imperative presented by the numbers it is not surprising that we have full fledged government departments and ministries to support this section. But are they actually effective? How much do the government officers really know running small-scale enterprises? do they really care about the rough and tumble of cut-throat competition?... I have my doubts.
Sunday, November 18, 2007
Design, Style and Functionality
I was catching up with some of last weekend's columns when I came across an interesting piece by Shoba Narayan (TheGood Life, Mint-Lounge), titled, "Where Style and Functionality Converge".
It was a nice update on some contemporary designers:
Naotsu Fukasawa: A recluse who designs everything from hi-tech gadgets to toasters and plates, through his company Plusminuszero. His designs follow Louis Sullivan's dictum, "form follows function" -
Neil Foley in Bangalore - the 'Jellyfish Light'
Lokus Design, Pune and its sleek furniture for Jindal Steel.
Design Direction, Pune for award winning medical equipment, as well as bio-degradable sandals called. "Solemates".
And Kerala's Kumbham range designed by K.B. Jinan, a social activist and designer who is helping revive the traditional terracotta craft.
It was a nice update on some contemporary designers:
Naotsu Fukasawa: A recluse who designs everything from hi-tech gadgets to toasters and plates, through his company Plusminuszero. His designs follow Louis Sullivan's dictum, "form follows function" -
His objects don't simply take up space; they don't shout and scream for attention. They simply recline in soft repose and wait for you to discover them...Take for instance his sole bag - a large bag with a canvas shoe-sole bottom that makes it perfect for resting flat on the ground.
Neil Foley in Bangalore - the 'Jellyfish Light'
Lokus Design, Pune and its sleek furniture for Jindal Steel.
Design Direction, Pune for award winning medical equipment, as well as bio-degradable sandals called. "Solemates".
And Kerala's Kumbham range designed by K.B. Jinan, a social activist and designer who is helping revive the traditional terracotta craft.
Sunday, November 04, 2007
Hyderabad & HICC
Sometimes you turn a corner and come across something completely unexpected. This is what happened to me this week at Hyderabad.
We had landed from Delhi to participate in an international conference. The venue was called Hyderabad International Convention Centre (HICC) - it sounded grand but drivers from the largest rental-car company in Hyderabad had no idea where it was located.
We strayed for over 5km in Cyberabad before somebody insisted that the venue was actually inside a barren looking trade-fair area. We had been turned away from the gates earlier by guards who told us that nothing was going on inside. There were no signboards or banners anywhere to direct the 1500 people expected to attend the event.
As it turned out, HICC was inside the trade fair area, tucked away deep inside, behind Novotel - a 5-star hotel. Being one of the many exhibitors, we had to enter the large building from the rear, and once inside, the signs were not too encouraging. In a massive hall, people were still creating a podium for an event that was to take place within two hours. The exhibition area was barren, except for a few workers trying to fix electricity connections for the stalls.
Within an hour the scene was completely transformed. Thousands of chairs had been arranged, the podium had become picture-perfect and the sound and lighting system were functioning flawlessly. Obviously we were at no ordinary venue.
I learnt later that HICC was developed and owned by a joint venture between Emaar Properties PJSC, Dubai and Andhra Pradesh Industrial Infrastructure Corporation Ltd. Managed by Accor; world's largest hospitality business operator. It was conceived, designed and created to handle small meetings of 50 people to large scale events for 5000 people. The convention centre formally opened just last year, with the Pravasi Bhartiya Divas convention on January 7th 2006.
The large pillar-free internal hall (6,480 sq. meters) could be partitioned into six halls in an open capacity, holding up to 400 tables in Banquet setting and 6000 in cocktail. The pre function foyer area exceeded 6500 sq meters. The Centre has mobile operable walls, which when expanded accommodates up to 5000 people. The mobile operable walls were soundproof, built in the US and had been covered with Teak and Silk.
On the third and top floor of this complex were exclusive board rooms that remained on 24-hour stand-by. From here you could look through the sheet glass windows and see all the signs of a booming economy - construction of apartment complexes, hotels, and highways in areas surrounding Kukatpally.
The complex was manned by around 200 personnel in neat, color-coded uniforms (black for housekeeping, white for F&B, officers in suits). One of them confided that a few weeks ago, Schneider Electric had booked the entire hotel & HICC for five days and paid a total of Rs. 29 Crores!
He also added with a tinge of pride that the only thing Indian in the entire complex were the carom boards in the staff club!
We had landed from Delhi to participate in an international conference. The venue was called Hyderabad International Convention Centre (HICC) - it sounded grand but drivers from the largest rental-car company in Hyderabad had no idea where it was located.
We strayed for over 5km in Cyberabad before somebody insisted that the venue was actually inside a barren looking trade-fair area. We had been turned away from the gates earlier by guards who told us that nothing was going on inside. There were no signboards or banners anywhere to direct the 1500 people expected to attend the event.
As it turned out, HICC was inside the trade fair area, tucked away deep inside, behind Novotel - a 5-star hotel. Being one of the many exhibitors, we had to enter the large building from the rear, and once inside, the signs were not too encouraging. In a massive hall, people were still creating a podium for an event that was to take place within two hours. The exhibition area was barren, except for a few workers trying to fix electricity connections for the stalls.
Within an hour the scene was completely transformed. Thousands of chairs had been arranged, the podium had become picture-perfect and the sound and lighting system were functioning flawlessly. Obviously we were at no ordinary venue.
I learnt later that HICC was developed and owned by a joint venture between Emaar Properties PJSC, Dubai and Andhra Pradesh Industrial Infrastructure Corporation Ltd. Managed by Accor; world's largest hospitality business operator. It was conceived, designed and created to handle small meetings of 50 people to large scale events for 5000 people. The convention centre formally opened just last year, with the Pravasi Bhartiya Divas convention on January 7th 2006.
The large pillar-free internal hall (6,480 sq. meters) could be partitioned into six halls in an open capacity, holding up to 400 tables in Banquet setting and 6000 in cocktail. The pre function foyer area exceeded 6500 sq meters. The Centre has mobile operable walls, which when expanded accommodates up to 5000 people. The mobile operable walls were soundproof, built in the US and had been covered with Teak and Silk.
On the third and top floor of this complex were exclusive board rooms that remained on 24-hour stand-by. From here you could look through the sheet glass windows and see all the signs of a booming economy - construction of apartment complexes, hotels, and highways in areas surrounding Kukatpally.
The complex was manned by around 200 personnel in neat, color-coded uniforms (black for housekeeping, white for F&B, officers in suits). One of them confided that a few weeks ago, Schneider Electric had booked the entire hotel & HICC for five days and paid a total of Rs. 29 Crores!
He also added with a tinge of pride that the only thing Indian in the entire complex were the carom boards in the staff club!
Friday, October 26, 2007
Prepaid Cards in Japan
Multi-purpose prepaid travel cards embedded with an IC–chip is taking Japan closer to cashless transactions.
There are over ten IC chip car makers in Japan and all of them use Sony’s FeliCa technology. IC cards can store a wealth of information and up to 16 separate servicee applications can be read and authenticated in 0.1 seconds. The leading ones are -
Suica-card: Launched in November 2001 by JR (Japan Railways) East, serves the Kanto area, including the Tokyo-Yokohama conurbation. This is a contactless prepaid card that triggers automatic deduction at the ticket gates. An E-money feature added in 2004, allowing payment at vending machines, station kiosks, and shops around stations. 20 million in circulation, usable across 18,500 retails outlets. Service is also available on mobile phones from the bid three carriers – DoCoMo, AU and Softbank
Pasmo-card: The latest rage. Launched early this year by a consortium of over 100 train bus and subway companies across Kanto region. Goes with a catchy slogan, “Densha-mo, Bus-mo, Pasmo”. 3 million cards were sold in the first three weeks..
There are over ten IC chip car makers in Japan and all of them use Sony’s FeliCa technology. IC cards can store a wealth of information and up to 16 separate servicee applications can be read and authenticated in 0.1 seconds. The leading ones are -
Suica-card: Launched in November 2001 by JR (Japan Railways) East, serves the Kanto area, including the Tokyo-Yokohama conurbation. This is a contactless prepaid card that triggers automatic deduction at the ticket gates. An E-money feature added in 2004, allowing payment at vending machines, station kiosks, and shops around stations. 20 million in circulation, usable across 18,500 retails outlets. Service is also available on mobile phones from the bid three carriers – DoCoMo, AU and Softbank
Pasmo-card: The latest rage. Launched early this year by a consortium of over 100 train bus and subway companies across Kanto region. Goes with a catchy slogan, “Densha-mo, Bus-mo, Pasmo”. 3 million cards were sold in the first three weeks..
Sunday, October 21, 2007
House Hunting
This weekend we set a new record -- the largest number of houses checked in two days.
We had started at Sector-22 in Dwarka. This is at the far end of the new township, an area where the Metro is yet to reach. Here you have large swathes of land that have been earmarked for various ambitious projects - a new Inter-State Bus Terminal, A Metro Terminus, an International Convention Centre by DLF (Sec-24), a new diplomatic enclave (Sec.), etc.,
We visited three apartment complexes - Vasudhara, JP Society, Guru Ram Das Apartments. All these looked fully completed but, strangely, there was nobody around except for a couple of bored guards.
It turned out that more than 50 building-societies are under investigation by the CBI for a range of illegal activities. A former Registrar of Coop Societies (Mr. Diwakar) was under detention for selling away plots to unauthorized builders -- a scam worth Rs.3000 Cr; In JP society, housing units had been sold to multiple buyers; in Kailash Apts., the original allotees were locked in a legal battle with folks who had purchased the property on a "Power of Attorney"; another builder in Sec-22 had constructed extra blocks in an area earmarked for a community park.
Dwarka is a mess waiting to be sorted out. Maybe we should be looking elsewhere...
NOIDA (27 October 2007)
We had started at Sector-22 in Dwarka. This is at the far end of the new township, an area where the Metro is yet to reach. Here you have large swathes of land that have been earmarked for various ambitious projects - a new Inter-State Bus Terminal, A Metro Terminus, an International Convention Centre by DLF (Sec-24), a new diplomatic enclave (Sec.), etc.,
We visited three apartment complexes - Vasudhara, JP Society, Guru Ram Das Apartments. All these looked fully completed but, strangely, there was nobody around except for a couple of bored guards.
It turned out that more than 50 building-societies are under investigation by the CBI for a range of illegal activities. A former Registrar of Coop Societies (Mr. Diwakar) was under detention for selling away plots to unauthorized builders -- a scam worth Rs.3000 Cr; In JP society, housing units had been sold to multiple buyers; in Kailash Apts., the original allotees were locked in a legal battle with folks who had purchased the property on a "Power of Attorney"; another builder in Sec-22 had constructed extra blocks in an area earmarked for a community park.
Dwarka is a mess waiting to be sorted out. Maybe we should be looking elsewhere...
NOIDA (27 October 2007)
- 3BDRs are going for 50-65L these days in Sectors 50, 51, 105 and 82
- In UP, houses are sold only on as Leasehold properties for a period of 99 years. Transfer of property is possible only after it has been formally registered in a persons name. It is not enough if a new has been 'alloted' to a person. He has to have it registered for any further transactions.
- Noida Development Authority (NDA) has built HIG flats in Sectors 61, 82 and 105. These are low-rise apartments but have no power back-up, club, landscaped surroundings or swimming pools that are de rigueur in most of the new private apartment complexes.
- Brokers hide as much as they reveal: They usually charge 2% of the total transaction cost (excluding, perhaps, the registration costs). Nearly all of them are a picture of earnest sincerity. They claim to have your own interest uppermost on their minds. But they do not tell you many things upfront. So the questions to ask are:
* Are they registered with the government authorities?
* Are they selling properties that carry proper registration papers?
* How much does the seller want in cheque (bank loan) and cash (aka 'black money')?
* Is he picking up something from the Net and rehashing it for you (like Sandeep Goel did for the 3F propoerty at Sector-105?)
* How much is the earnest money required by the seller to hold the property in your name ill the registration papers are finalised?
Thursday, October 18, 2007
Interesting Magazine
I chanced upon this beautifully designed magazine today - Kyoto Journal.
Here are some interesting blogs from the site:
Here are some interesting blogs from the site:
- Virtual China: Lots of Sino-centric articles. Here is one on the booming unofficial trade between India and China
- Laughing Knees: Travelogue - lovely photographs!
- Chanpon Multi-cultural Japan online: I liked the article on experiencing Tokyo
Wednesday, October 17, 2007
An Award Function at IHC
16 October 2007‘
"Bored to Death" would be a mild phrase for today’s experience.
AC had invited me to a function at the Habitat Centre where he was receiving an award for International Business Excellence. The function was being organized by two agencies – International Study Circle (ISC) and Institute for Economic Studies (IES), and was to start at 11:00 AM. I had never heard of either organization.
At the venue I found AC and many people who walking about with colorful badges on their chests – the mark of the honored awardees. By 11:15 the hall had filled up but there was no trace of the dignitaries whose nameplates lined the dais. Time dragged on – we finished reading the newsletters supplied by SafeExpress, twiddled with stationery, took telephone calls and continued waiting. At 11:30, a garishly dressed fat woman trundled on-stage, complained about the mikes and asked the audience to have tea outside while the waiting continued. This was the MC – an apparition called Kavita Mukherjee who apparently was a Doordarshan newsreader. Not a great start at all.
A few minutes after 12:00 the missing dignitaries started appearing one by one. All the speakers without exception were retired bureaucrats and ministers. Dinosaurs from another era who rambled endlessly about pre-independence days, lathi charges by the Brits, flag-waving, linguistic traditions of India and other matters completely irrelevant to the topic of the seminar which was “Economic Development”.
Former Election Commissioner, GK Krishnamurthy smirked and snarled some stories about his glory days as a lawyer & bureaucrat; an old fogy (former cabinet minister, accomplished sycophant) went on and on in Bhojpuri about his conversations with the first president of India, Rajendra Prasad, and about his experiences in Mauritius. The only person who made a relatively short and sensible speech was the Governor of Orissa.
In the three hours of speeches, not one luminary informed the audience how and why the awardees were selected. The awardees too seemed surprised by this random honor and many had sent their relatives or employees to collect it. AC was grateful - “It is a great encouragement for people like me…to be brought alongside folks from India-Infoline and SafeExpress”.
It makes you wonder - Here i was, sitting in hall full of enterprising entrepreneurs who had struggled hard to create their businesses. These people were being given awards by people who had no idea of difficulties involved or any experience in this line. Who needed this function more?- ISC and IES or the awardees?
Anyway, different strokes for different folks. As for me, I am convinced that the organizers just wanted an audience to humor some ghastly speakers. Sadists!
"Bored to Death" would be a mild phrase for today’s experience.
AC had invited me to a function at the Habitat Centre where he was receiving an award for International Business Excellence. The function was being organized by two agencies – International Study Circle (ISC) and Institute for Economic Studies (IES), and was to start at 11:00 AM. I had never heard of either organization.
At the venue I found AC and many people who walking about with colorful badges on their chests – the mark of the honored awardees. By 11:15 the hall had filled up but there was no trace of the dignitaries whose nameplates lined the dais. Time dragged on – we finished reading the newsletters supplied by SafeExpress, twiddled with stationery, took telephone calls and continued waiting. At 11:30, a garishly dressed fat woman trundled on-stage, complained about the mikes and asked the audience to have tea outside while the waiting continued. This was the MC – an apparition called Kavita Mukherjee who apparently was a Doordarshan newsreader. Not a great start at all.
A few minutes after 12:00 the missing dignitaries started appearing one by one. All the speakers without exception were retired bureaucrats and ministers. Dinosaurs from another era who rambled endlessly about pre-independence days, lathi charges by the Brits, flag-waving, linguistic traditions of India and other matters completely irrelevant to the topic of the seminar which was “Economic Development”.
Former Election Commissioner, GK Krishnamurthy smirked and snarled some stories about his glory days as a lawyer & bureaucrat; an old fogy (former cabinet minister, accomplished sycophant) went on and on in Bhojpuri about his conversations with the first president of India, Rajendra Prasad, and about his experiences in Mauritius. The only person who made a relatively short and sensible speech was the Governor of Orissa.
In the three hours of speeches, not one luminary informed the audience how and why the awardees were selected. The awardees too seemed surprised by this random honor and many had sent their relatives or employees to collect it. AC was grateful - “It is a great encouragement for people like me…to be brought alongside folks from India-Infoline and SafeExpress”.
It makes you wonder - Here i was, sitting in hall full of enterprising entrepreneurs who had struggled hard to create their businesses. These people were being given awards by people who had no idea of difficulties involved or any experience in this line. Who needed this function more?- ISC and IES or the awardees?
Anyway, different strokes for different folks. As for me, I am convinced that the organizers just wanted an audience to humor some ghastly speakers. Sadists!
Monday, October 15, 2007
An Unusual Service Engineer
I love the innards of machines. And given half a chance I'd love pry through to see the world hidden by painted sheets of cold rolled steel.
Yesterday we had a service-engineer over for checking our washing machine for unusual vibration and sounds. After removing the top panel, when Mukesh saw me taking a closer look at the dusty interiors, he volunteered to explain the components inside, "Those are the solenoid valves that control water flow; those are the water level monitors, the switch console; the concrete blocks on the side and top help keep that help keep the machine stable at high spins."
"The motor of a front-loading machine is powerful - 850W compared to the 400W (max) that goes into a top loading machine...they consume more power but are more efficient in terms of water consumption and cleaning capacity...a full cycle consumes 1KwH and costs about Rs.1O (Rs.3 electricity; Rs.7 for washing powder)".
This guy was unusual. It is not often that you get to see an SE who loves his job, so I asked him how he had got into this profession. He was an ITI pass out who who had fallen in love instrumentation engineering. He had been working an electrician earlier, repairing odd household appliances until one day he landed at the house of an IIT professor for repairing a ceiling fan. The old man was so pleased with his work that he went on to personally make some chaai for Mukesh and asked him to drop by whenever he needed help.
"Prof. Rajinder Singh Mahana is my Guru", says Mukesh, "whenever we get into a discussion, time just flies!". The knowledge and skill shows. He had identified design flaws in IFB machines, which, if rectified, could save the customers and its customers millions. While visiting a friend working with LG, he had suggested changes in a component that collected dirt and debris - another design flaw for which customers had to replace the part (Rs.1700 apiece) from time to time. The flaw was noted and duly corrected by an LG manager who took all the credit and didn't even bother to thank Mukesh.
This struck me as an instance of a certain type of mean-mindedness and deficiency of grace and generosity that is the mark of many an Indian manager.
Many manufacturing companies would give and arm and a leg to get people like Mukesh. Instead they just wither away under petty managers.
Yesterday we had a service-engineer over for checking our washing machine for unusual vibration and sounds. After removing the top panel, when Mukesh saw me taking a closer look at the dusty interiors, he volunteered to explain the components inside, "Those are the solenoid valves that control water flow; those are the water level monitors, the switch console; the concrete blocks on the side and top help keep that help keep the machine stable at high spins."
"The motor of a front-loading machine is powerful - 850W compared to the 400W (max) that goes into a top loading machine...they consume more power but are more efficient in terms of water consumption and cleaning capacity...a full cycle consumes 1KwH and costs about Rs.1O (Rs.3 electricity; Rs.7 for washing powder)".
This guy was unusual. It is not often that you get to see an SE who loves his job, so I asked him how he had got into this profession. He was an ITI pass out who who had fallen in love instrumentation engineering. He had been working an electrician earlier, repairing odd household appliances until one day he landed at the house of an IIT professor for repairing a ceiling fan. The old man was so pleased with his work that he went on to personally make some chaai for Mukesh and asked him to drop by whenever he needed help.
"Prof. Rajinder Singh Mahana is my Guru", says Mukesh, "whenever we get into a discussion, time just flies!". The knowledge and skill shows. He had identified design flaws in IFB machines, which, if rectified, could save the customers and its customers millions. While visiting a friend working with LG, he had suggested changes in a component that collected dirt and debris - another design flaw for which customers had to replace the part (Rs.1700 apiece) from time to time. The flaw was noted and duly corrected by an LG manager who took all the credit and didn't even bother to thank Mukesh.
This struck me as an instance of a certain type of mean-mindedness and deficiency of grace and generosity that is the mark of many an Indian manager.
Many manufacturing companies would give and arm and a leg to get people like Mukesh. Instead they just wither away under petty managers.
Sunday, October 14, 2007
Nuggets From A Dead Language
Some folks call Latin a dead language; they say the same thing about Sanskrit. But there is nothing like a dead language to add some class to your national symbols, motto's, plaques and banners of all sorts. It is difficult to find a legal document in English that does not carry a sprinkling of per se, sub peona and suo moto. There is even a line of footwear called Quo Vadis.
The only times I desperately wanted to know the meaning of Latin words and phrases was while reading Asterix comics. Centurions and one-legged, toothless pirates carried it with such elan that left you desperately seeking translations.
Here is a collection of interesting Latin from Wikipadia. Some of the meanings were surprising:
affidavit: "he asserted"
agenda: "things to be done"
alma mater: "nourishing mother"
bona fide: "in good faith"
carpe diem: "seize the day" - An exhortation to live for today. From Horace, Odes I
ceteris paribus: "all things being equal" - A phrase which rules out outside changes interfering with a situation.
citius altius fortius - "faster, higher, stronger" - Motto of modern Olympics
curriculum vitae: "course of life"
Magna Carta: "great paper"
magister dixit -"the master has said it" - Canonical medieval reference to Aristotle, precluding further discussion (So what about Madhuri Dixit ;)
memento mori - "remember that [you will] die"
nosce te ipsum - "know thyself"- From Cicero, inscribed on the Temple of Apollo at Delphi
Peccavi - "I have sinned" - Telegraph message and pun from Charles Napier, British general, upon completely subjugating the Indian province of Sindh in 1842.
pons asinorum - "bridge of asses" - Any obstacle that stupid people find hard to cross. Originally used of Euclid's Fifth Proposition in geometry.
pulvis et umbra sumus - "we are dust and shadow" - From Horace, Carmina
quid pro quo - "what for what" - Signifies a favor exchanged for a favor.
quod erat demonstrandum (Q.E.D.) - "which was to be demonstrated" - Sometimes translated loosely into English as "The Five Ws", W.W.W.W.W., which stands for "Which Was What We Wanted".
sic - "thus" - Or "just so". States that the preceding quoted material appears exactly that way in the source, despite any errors of spelling, grammar, usage, or fact that may be present.
sine qua non - "without which not" - Used to denote something that is an essential part of the whole.
sine die - "without a day" - In modern legal context, it means there is nothing left for the court to do, so no date for further proceedings is set.
sub poena - "under penalty" - Commonly rendered subpoena. Said of a request, usually by a court, that must be complied with on pain of punishment.
Sui generis - "Of its own kind" - In a class of its own.
sum quod eris - "I am what you will be" - A gravestone inscription to remind the reader of the inevitability of death (cf. memento mori). Also rendered fui quod sis ("I have been what you are") and tu fui ego eris ("I have been you, you will be I").
suo moto - "upon one's own initiative"
The only times I desperately wanted to know the meaning of Latin words and phrases was while reading Asterix comics. Centurions and one-legged, toothless pirates carried it with such elan that left you desperately seeking translations.
Here is a collection of interesting Latin from Wikipadia. Some of the meanings were surprising:
affidavit: "he asserted"
agenda: "things to be done"
alma mater: "nourishing mother"
bona fide: "in good faith"
carpe diem: "seize the day" - An exhortation to live for today. From Horace, Odes I
ceteris paribus: "all things being equal" - A phrase which rules out outside changes interfering with a situation.
citius altius fortius - "faster, higher, stronger" - Motto of modern Olympics
curriculum vitae: "course of life"
Magna Carta: "great paper"
magister dixit -"the master has said it" - Canonical medieval reference to Aristotle, precluding further discussion (So what about Madhuri Dixit ;)
memento mori - "remember that [you will] die"
nosce te ipsum - "know thyself"- From Cicero, inscribed on the Temple of Apollo at Delphi
Peccavi - "I have sinned" - Telegraph message and pun from Charles Napier, British general, upon completely subjugating the Indian province of Sindh in 1842.
pons asinorum - "bridge of asses" - Any obstacle that stupid people find hard to cross. Originally used of Euclid's Fifth Proposition in geometry.
pulvis et umbra sumus - "we are dust and shadow" - From Horace, Carmina
quid pro quo - "what for what" - Signifies a favor exchanged for a favor.
quod erat demonstrandum (Q.E.D.) - "which was to be demonstrated" - Sometimes translated loosely into English as "The Five Ws", W.W.W.W.W., which stands for "Which Was What We Wanted".
sic - "thus" - Or "just so". States that the preceding quoted material appears exactly that way in the source, despite any errors of spelling, grammar, usage, or fact that may be present.
sine qua non - "without which not" - Used to denote something that is an essential part of the whole.
sine die - "without a day" - In modern legal context, it means there is nothing left for the court to do, so no date for further proceedings is set.
sub poena - "under penalty" - Commonly rendered subpoena. Said of a request, usually by a court, that must be complied with on pain of punishment.
Sui generis - "Of its own kind" - In a class of its own.
sum quod eris - "I am what you will be" - A gravestone inscription to remind the reader of the inevitability of death (cf. memento mori). Also rendered fui quod sis ("I have been what you are") and tu fui ego eris ("I have been you, you will be I").
suo moto - "upon one's own initiative"
Thursday, October 11, 2007
National Highways: Bad Implementation of Good Standards
Our recent drive along NH-17 in Karnataka was a nightmare. I always thought the roads in Kerala were bad until I saw these!
We covered some of the worst stretches at night so I was unable to photograph them. Most of the large vehicles on this road were tankers and trucks going to & fro refineries and thermal power plants in the area. Overturned trucks,and vehicles with broken axles were quite common along the route.
According to a BusinessLine report on Tuesday (09 Oct), a large number of trucks are now being carried by the Konkan Railway to avoid the roads along the western coast.
This region has climatic conditions similar to Thailand. So I wondered why our highways kept getting washed away in the monsoons every year.
According to Prof. AK Sarkar of BITS Pilani, "Our national highways follow international design standards. These parameters are not generally designed to withstand a lot of temperature variation...which creates problems for the longevity of our roads" (Tehelka 13 Oct. 2007)
But we have been having institutions like the Central Road Research Insitute (CRRI) for decades. What have they been up to all these years??
A more plausible explanation came from Mr. M. Tanaka, a Japanese Expert based in India, "In India, they have standards for pavement that are same as International Standards, but these are not implemented properly at the construction sites. They need better quality management during construction and more attention to the drainage. Moreover, overloaded truck and poor maintenance deteriorate pavement much faster than designed."
NH17 is to be improved under NHDP-IIIA.
Wednesday, October 10, 2007
Tadao Ando & Miyake Issey
I read today, an interesting article - "Enhancing Japan's Cultural Crafts" - a discussion between two living legends of Japan - Tadao Ando and Miyake Issey (JapanEcho, August 2007).
The discussion started off with 21_21 Design Sight which was inaugurated on March 30 at the new Tokyo Midtown complex in Roppongi. It is a 'design museum' that preserves and introduces "Japan's legacy of design and faces the future while reflecting the trends of the current age".
The facility is operated by the Miyake Issey Foundation and, and was designed by Tadao Ando. Across Tokyo Midtown you also have Toto's architectural gallery, called Gallery Ma, as well as the National Art Centre and the Mori Art Museum.
But this post is not about galleries in Tokyo. It is about the thoughts of two individuals who represent the brightest facets of the island nation; ideas that have turned Japan from post-war rubble to an economic powerhouse.
I keep looking for the secrets of Japan's dynamism -- can some aspects of it be replicated in India? Having worked for ten years in a Japanese government agency, I am convinced that in today's Japan, the government machinery is the last place to seek dynamism. It is more like a sluggish, paranoid giant that lives in delusions of past grandeur (a familiar attitude in India), oblivious of world that is rapidly changing. It was wonderful to know that great minds are grappling with this problem.
Here are some excerpts:
"The really important thing is to have a goal -- to have a goal and to carefully manage your time...Japan became a powerhouse after the war because manufacturers took time to make their products while solving problems one by one. Lamenting about the current state of affairs with complaints about "kids these days" won't change anything; my idea is to increas the number of people with this patient, problem-solving mind-set, even if only a few.
"If we trace the roots of Japanese design, we discover that its origins lie in "daily-life design". In the late 1920's Yanagi Muneyoshi, the father of industrial designer Yanagi Munemichi, led what was called the Japanese folk-craft movement. It emphasized discovery of beauty amid daily life and produced work of wonderful quality that were highly praised by Bernard Leach, a British potter who visited Japan during that period...
"Without a past, you cannot have a prestnt. And because there is a present, there will be a future.
"If you look at redevelopment projects like Shinagawa and Shiodome, you can see that they've been built neatly, quickly, and beautifully, but they don't respond to people's curiosity. We need to build city communities where you can enjoy yourself without spending money and that satisfy curiosity.
"In Japan people think it's "cultural" to bring objects from other countries, but this is nothing more than paying money to borrow things...
"With few exceptions, bureaucrats are a rather dull bunch. And even politicians are mostly indifferent -- they only apply their mind to elections. Most bureaucrats have done nothing but study since they were children, and they haven't cultivated their sensibilities. People like these, who have grown up without time to think freely on their own, are the ones leading the country. In this light it is imperative that we make changes in the current structures and systems.
"All government ministries and agencies are structured vertically, and there is complete lack of dialogue among them...
"Japanese havn't managed to inteact will with the rest of the world. People may blame this on the language barrier, but it's more a matter of psychological inertia. It is more important than ever for Japanese to enter into dialogue with the rest of the world. We have to realise that we are living in such an age."
Tuesday, October 09, 2007
The State of Kerala's Highways
Route: Kattipuram – Edappal – Kunnamkulam – Guruvayur (~40km)
A steady drizzle greeted us when we disembarked at Kattipuram. Between the five of us, we had as many pieces of luggage, one umbrella and not the slightest idea of where the exit was. Luckily, the only other person on the platform happened to be a lady in a blue sari, holding flags and a signal beacon. Soon after she waved off the train, this railway official not only helped us reach the platform but also summoned a taxi to take us to Guruvayur (40km, Rs. 520)
It was an interesting drive from Kattipuram to Guruvayur. The driver, Ravi (098.955.64524), went blazing into the dark night, one hand on the wheel and the other holding a mobile into which he updated his friends on the amby’s latest coordinates.
The roads were not as bad as NH-17 but we wondered aloud about the variations – why were some stretches so terrible? Why did some stretches spilt into two levels separated by a wicker fence? Curious passengers were just what the doctor ordered for Ravi. For the rest of the journey he was telling us about the hazards of corruption, politics, mismanagement and road engineering in Kerala.
A Malaysian company had abandoned the Kattipuram-Guruvayur road construction after its representative committed suicide over non-payment of dues. The PWD had refused to pay because the road had not been completed within the contract period. Why? – because water distribution pipes had been laid alongside the single-lane roads and relocating these pipes required the cooperation of another government department – the Kerala Water Works, which did not have the money or the resources to do the job.
Soon after the suicide, PWD contracted a local company to finish the job for Rs. 76 lakhs. The job was completed “as usual” and when the rains arrived, the roads promptly got washed away.
That was Ravi’s version. What was the real story? Here is some more information from Abhishek.
This road was a part of the Rs 16.32 billion Kerala State Transport Project (KSTP), inked in 2002. Out of this, Rs 3.88 billion was funded by the state and the rest came from the World Bank. The work started in April 2003 and was supposed to be completed by April 2006. But, the project, which was to be completed in four phases, had come to a standstill in the first phase itself, with only 30 per cent of the work completed. Time and cost overruns had spiked the state's share to over Rs 2,000 crore.
The KSTP project was conceived in 2002 in the midst of a fiscal and infrastructure crisis in Kerala. Motor vehicle traffic on Kerala's roads had been rising annually by 13% since 1990. However, 70% of the State Highway roads remained single-lane (3.8 meters wide) roads and the rest were merely dual-lane roads (7.0m) with limited shoulder space.
WB agreed to lend GOK a loan of $255 million with the understanding that GOK would contribute around $81 million on its own.
The Kattipuram-Guruvayur road was part a 127km section contracted to PATI-BEL JV for Rs. 213 Crores (Rs.1.7 Cr / Km). PATI Bel is a joint venture between PATI of Malaysia and Bhageeratha Constructions, Kerala. The departed soul - Lee See Ben, was the chief project manager of this project.
…………………………………
Interesting points:
A steady drizzle greeted us when we disembarked at Kattipuram. Between the five of us, we had as many pieces of luggage, one umbrella and not the slightest idea of where the exit was. Luckily, the only other person on the platform happened to be a lady in a blue sari, holding flags and a signal beacon. Soon after she waved off the train, this railway official not only helped us reach the platform but also summoned a taxi to take us to Guruvayur (40km, Rs. 520)
It was an interesting drive from Kattipuram to Guruvayur. The driver, Ravi (098.955.64524), went blazing into the dark night, one hand on the wheel and the other holding a mobile into which he updated his friends on the amby’s latest coordinates.
The roads were not as bad as NH-17 but we wondered aloud about the variations – why were some stretches so terrible? Why did some stretches spilt into two levels separated by a wicker fence? Curious passengers were just what the doctor ordered for Ravi. For the rest of the journey he was telling us about the hazards of corruption, politics, mismanagement and road engineering in Kerala.
A Malaysian company had abandoned the Kattipuram-Guruvayur road construction after its representative committed suicide over non-payment of dues. The PWD had refused to pay because the road had not been completed within the contract period. Why? – because water distribution pipes had been laid alongside the single-lane roads and relocating these pipes required the cooperation of another government department – the Kerala Water Works, which did not have the money or the resources to do the job.
Soon after the suicide, PWD contracted a local company to finish the job for Rs. 76 lakhs. The job was completed “as usual” and when the rains arrived, the roads promptly got washed away.
That was Ravi’s version. What was the real story? Here is some more information from Abhishek.
This road was a part of the Rs 16.32 billion Kerala State Transport Project (KSTP), inked in 2002. Out of this, Rs 3.88 billion was funded by the state and the rest came from the World Bank. The work started in April 2003 and was supposed to be completed by April 2006. But, the project, which was to be completed in four phases, had come to a standstill in the first phase itself, with only 30 per cent of the work completed. Time and cost overruns had spiked the state's share to over Rs 2,000 crore.
The KSTP project was conceived in 2002 in the midst of a fiscal and infrastructure crisis in Kerala. Motor vehicle traffic on Kerala's roads had been rising annually by 13% since 1990. However, 70% of the State Highway roads remained single-lane (3.8 meters wide) roads and the rest were merely dual-lane roads (7.0m) with limited shoulder space.
WB agreed to lend GOK a loan of $255 million with the understanding that GOK would contribute around $81 million on its own.
The Kattipuram-Guruvayur road was part a 127km section contracted to PATI-BEL JV for Rs. 213 Crores (Rs.1.7 Cr / Km). PATI Bel is a joint venture between PATI of Malaysia and Bhageeratha Constructions, Kerala. The departed soul - Lee See Ben, was the chief project manager of this project.
…………………………………
Interesting points:
- Maintenance: Less than 70% of Kerala road network's annual maintenance needs, which are estimated at $50 million, are met by the PWD's slim budget
- Accident Rates: Kerala is also infamous for one of the highest accident rates of any state in India at 2,500 deaths annually. Loss of life and property cause an estimated loss of $100-200 million per year, or the equivalent of 1-2% of Kerala's annual GDP
- Highly indebted State Govt.: For the past decade or so, Kerala's government expenditure had outstripped its revenue both in absolute size and growth. While total revenue grew annually during 1993 -2002 at 11%, total expenditure grew by 13%, taking Kerala's fiscal deficit from 1.4% of GDP in 1993 to 4.5% of GDP in 2002. Faced with an over-stretched revenue base, the government took on additional debt to finance this deficit. But, at a debt/GDSP ratio of 32%, Kerala's debt burden was considerably higher than all of the southern states (AP, TN and K) as well as the Indian average of 24%. On a per capita basis, Kerala carried Rs. 7,414 of debt, placing it in significantly more danger than the next worst southern state, AP, at Rs. 4,724 and the Indian average at Rs. 4,996.
Sunday, October 07, 2007
Coorg: Land of Coffee, Cardamom and Cariappa
Date: 26-28 September 2007
Route: NH-48 - Mangalore-Bantwal; State Highways through Mani-Puttur-Suliya-Sampan-Madikeri
Mangalore has a small airport perched on the bulldozed hilltops of Bajpe. Just after spending four hours at Mumbai’s swanky new domestic terminal, this one looked very pedestrian - an entry, a large hall, two conveyor belts, two ‘tourist –taxi’ counters and the exit.
A prepaid taxi to Madikeri costs Rs. 2100. Rather steep for 165km but not if you consider the fact that few drivers want to risk their lives, limbs and axles on this road. It was a long, stomach-churning ride. We were told that it would take five hours but a few miles after Suliya we found a long traffic jam in a reserve forest area. A truck overloaded with timber had sunk into a pothole and a Mallu crew was busy trying to dig out the wheels and haul it out with another Tata 5-tonner. We waited for 45mts and then decided to squeak past the mess. When we finally reached Madikeri, it was past 10:30PM – we had been on the road for nearly eight hours!
Mahindra Kodagu Valley looked lovely at night. Pathways laid with neat stone slabs and recessed lights, smartly dressed bellboys, a beautiful naalukettu foyer, cheerful staff (mostly locals), a smooth check-in and a quiet ride in an electric golf-cart to Jujuba - our cottage overlooking the rain-soaked hills.
MKV was much larger than the Mahindra Club property at Binsar. Spread across 33 acres, this resort had eight cottage complexes (170 rooms) named after flowering trees (Phalsa, Masaul, Carandas, Barbadas, Amla, Jujuba, Kakum and Lakoocha). A recreation room perched atop a hill overlooked coffee and cardamom plantations, a swimming pool, an ayurvedic centre, a jogging pathway and an adventure-activity area. It had a good restaurant serving buffet breakfast (Rs.170/head), a shop selling coffee, snacks and mementos. The resort employed over 300 staff and claimed that it was fully booked for the season. If that was true, there would have been around 700 people around but it was so spread out and multi-tiered and that it never seemed crowded.
We spent the morning exploring the facilities – recreation room (TT, caroms, chess, artwork), the jogging path, the swimming pool and photographing large butterflies and dew-laden spider orb-webs. In the afternoon we went for some local sightseeing. An MKV bus (Rs.150 pax) took us on a well conducted tour to Abbey Falls, Gaddige mausoleum complex – a set of three Islamic style tombs, the Omkareshwar temple and, finally, to Raja’s Seat, a place from where the local rulers watched alleged traitors and criminals getting tossed off a cliff while enjoying the sunsets.
Back at MKV by 6:30PM, I spent some time browsing some coffee-table books on Kodagu history. The Coorgis fought wars for the Lingayat kings Muddu Raja (1680s) and Doddaveerappa (early 1700); got slaughtered for opposing Hyder Ali and Tipu Sultan and found their salvation in an alliance with Robert Tayor (East India Co.) against Tipu in the Battle of Srirangapatnam (1799). Soon after Chikkaveera Raja’s death, the British annexed Coorg in 1834 and turned it into what we now know as the “Scotland of the East” and the “Land of Coffee, Cardamom and Cariappa”.
It was a strange story of a martial community that never had a king of their own. Their customs, traditions (ancestor worship, sacred groves), language and architecture point to strong links with the Nairs of Kerala. It seemed quite likely that they migrated upland from the nearest port cities of Cannanore and Telicherry in Kerala. Wonder if some conclusive research has gone into these links.
The town itself was unimpressive. You would have expected a town dominated by army veterans would have some semblance of a neat cantonment. Not so. It was sad to see statues of Field Marshal Cariappa and Gen. Thimmaya looking down sternly on another ramshackle urban sprawl.
We returned to Mangalore in an Indica. The vehicle from Machaiah Travels (092.433.93238) was a lot smoother and faster than the antiquated amby that had brought us to into the hills.
Route: NH-48 - Mangalore-Bantwal; State Highways through Mani-Puttur-Suliya-Sampan-Madikeri
Mangalore has a small airport perched on the bulldozed hilltops of Bajpe. Just after spending four hours at Mumbai’s swanky new domestic terminal, this one looked very pedestrian - an entry, a large hall, two conveyor belts, two ‘tourist –taxi’ counters and the exit.
A prepaid taxi to Madikeri costs Rs. 2100. Rather steep for 165km but not if you consider the fact that few drivers want to risk their lives, limbs and axles on this road. It was a long, stomach-churning ride. We were told that it would take five hours but a few miles after Suliya we found a long traffic jam in a reserve forest area. A truck overloaded with timber had sunk into a pothole and a Mallu crew was busy trying to dig out the wheels and haul it out with another Tata 5-tonner. We waited for 45mts and then decided to squeak past the mess. When we finally reached Madikeri, it was past 10:30PM – we had been on the road for nearly eight hours!
Mahindra Kodagu Valley looked lovely at night. Pathways laid with neat stone slabs and recessed lights, smartly dressed bellboys, a beautiful naalukettu foyer, cheerful staff (mostly locals), a smooth check-in and a quiet ride in an electric golf-cart to Jujuba - our cottage overlooking the rain-soaked hills.
MKV was much larger than the Mahindra Club property at Binsar. Spread across 33 acres, this resort had eight cottage complexes (170 rooms) named after flowering trees (Phalsa, Masaul, Carandas, Barbadas, Amla, Jujuba, Kakum and Lakoocha). A recreation room perched atop a hill overlooked coffee and cardamom plantations, a swimming pool, an ayurvedic centre, a jogging pathway and an adventure-activity area. It had a good restaurant serving buffet breakfast (Rs.170/head), a shop selling coffee, snacks and mementos. The resort employed over 300 staff and claimed that it was fully booked for the season. If that was true, there would have been around 700 people around but it was so spread out and multi-tiered and that it never seemed crowded.
We spent the morning exploring the facilities – recreation room (TT, caroms, chess, artwork), the jogging path, the swimming pool and photographing large butterflies and dew-laden spider orb-webs. In the afternoon we went for some local sightseeing. An MKV bus (Rs.150 pax) took us on a well conducted tour to Abbey Falls, Gaddige mausoleum complex – a set of three Islamic style tombs, the Omkareshwar temple and, finally, to Raja’s Seat, a place from where the local rulers watched alleged traitors and criminals getting tossed off a cliff while enjoying the sunsets.
Back at MKV by 6:30PM, I spent some time browsing some coffee-table books on Kodagu history. The Coorgis fought wars for the Lingayat kings Muddu Raja (1680s) and Doddaveerappa (early 1700); got slaughtered for opposing Hyder Ali and Tipu Sultan and found their salvation in an alliance with Robert Tayor (East India Co.) against Tipu in the Battle of Srirangapatnam (1799). Soon after Chikkaveera Raja’s death, the British annexed Coorg in 1834 and turned it into what we now know as the “Scotland of the East” and the “Land of Coffee, Cardamom and Cariappa”.
It was a strange story of a martial community that never had a king of their own. Their customs, traditions (ancestor worship, sacred groves), language and architecture point to strong links with the Nairs of Kerala. It seemed quite likely that they migrated upland from the nearest port cities of Cannanore and Telicherry in Kerala. Wonder if some conclusive research has gone into these links.
The town itself was unimpressive. You would have expected a town dominated by army veterans would have some semblance of a neat cantonment. Not so. It was sad to see statues of Field Marshal Cariappa and Gen. Thimmaya looking down sternly on another ramshackle urban sprawl.
We returned to Mangalore in an Indica. The vehicle from Machaiah Travels (092.433.93238) was a lot smoother and faster than the antiquated amby that had brought us to into the hills.
Sunday, September 16, 2007
What is Leveraging?
Simply put, leveraging is borrowing to invest. The most familiar use of leverage is using a mortgage to buy a home. In return for a down payment you receive funds to purchase an asset that would otherwise be too expensive. The hope is that the home will appreciate in value, and when you sell you will be able to realize a profit over what you bought it for (including interest payments).
There are several ways in which markets can expand:
It is the last one - increasing consumer debt – where leveraging plays a big role.
Leverage can be created through options, futures, margin and other financial instruments. For example, say you have $1,000 to invest. This amount could be invested in 10 shares, but to increase leverage, you could invest the $1,000 in five options contracts. You would then control 500 shares instead of just 10.
Most companies use debt to finance operations. By doing so, a company increases its leverage because it can invest in business operations without increasing its equity. For example, if a company formed with an investment of $5 million from investors, the equity in the company is $5 million - this is the money the company uses to operate. If the company uses debt financing by borrowing $20 million, the company now has $25 million to invest in business operations and more opportunity to increase value for shareholders.
There are several ways in which markets can expand:
- By selling to hitherto closed markets (India, China)
- Through higher productivity- producing goods and services more cheaply
- Globalization - shifting production to low-cost countries
- Opening closed sectors for pvt companies - entering govt. domain of utilities, infrastructure, education and health
- Increasing levels of consumer debt
It is the last one - increasing consumer debt – where leveraging plays a big role.
Leverage can be created through options, futures, margin and other financial instruments. For example, say you have $1,000 to invest. This amount could be invested in 10 shares, but to increase leverage, you could invest the $1,000 in five options contracts. You would then control 500 shares instead of just 10.
Most companies use debt to finance operations. By doing so, a company increases its leverage because it can invest in business operations without increasing its equity. For example, if a company formed with an investment of $5 million from investors, the equity in the company is $5 million - this is the money the company uses to operate. If the company uses debt financing by borrowing $20 million, the company now has $25 million to invest in business operations and more opportunity to increase value for shareholders.
Monday, September 10, 2007
Economics & Self-Interest
I have been ploughing (slowly, painfully) through Amartya Sen's "The Argumentative Indian". A related wiki search led me to an interesting clip:
Clearly, he was making good use of pejorative rhetoric and sophistry (deceptive reasoning). But one question led to another and here is the days collection of interesting terms:
PUBLIC CHOICE THEORY studies the behavior of voters, politicians, and government officials as (mostly) self-interested agents and their interactions in the social system. It is the use of modern economic tools to study problems that are traditionally in the province of political science.
POSITIVE ECONOMICS sometimes defined as the economics of "what is", whereas normative economics discusses "what ought to be". It focuses on facts and cause-and-effect relationships to identify a problem or suggest how a system could be improved by changes in rules .
RATIONAL IGNORANCE: Ignorance about an issue is said to be "rational" when the cost of educating oneself about the issue sufficiently to make an informed decision can outweigh any potential benefit one could reasonably expect to gain from that decision, and so it would be irrational to waste time doing so.
PUBLIC GOOD is a good that is non-rivalrous and non-excludable. Consumption of the good by one individual does not reduce the amount of the good available for consumption by others;
BUDGET-MAXIMIZING MODEL argues that rational bureaucrats will always and everywhere seek to increase their budgets in order to increase their own power, thereby contributing strongly to state growth and potentially reducing social efficiency. This is an influential new stream of public choice theory and rational choice analysis in public administration inaugurated by William Niskanen, in 1971.
RENT SEEKING occurs when an individual, organization, or firm seeks to make money by manipulating the economic and/or legal environment rather than by making a profit through trade and production of wealth. Eg,: A farm lobby that seeks tariff protection or an entertainment lobby that seeks expansion of the scope of copyright.
The absurdity of public-choice theory is captured by Nobel Prize-winning economist Amartya Sen in the following little scenario: "Can you direct me to the railway station?" asks the stranger. "Certainly," says the local, pointing in the opposite direction, towards the post office, "and would you post this letter for me on your way?" "Certainly," says the stranger, resolving to open it to see if it contains anything worth stealing.
--Linda McQuaig, All You Can Eat
Clearly, he was making good use of pejorative rhetoric and sophistry (deceptive reasoning). But one question led to another and here is the days collection of interesting terms:
PUBLIC CHOICE THEORY studies the behavior of voters, politicians, and government officials as (mostly) self-interested agents and their interactions in the social system. It is the use of modern economic tools to study problems that are traditionally in the province of political science.
POSITIVE ECONOMICS sometimes defined as the economics of "what is", whereas normative economics discusses "what ought to be". It focuses on facts and cause-and-effect relationships to identify a problem or suggest how a system could be improved by changes in rules .
RATIONAL IGNORANCE: Ignorance about an issue is said to be "rational" when the cost of educating oneself about the issue sufficiently to make an informed decision can outweigh any potential benefit one could reasonably expect to gain from that decision, and so it would be irrational to waste time doing so.
PUBLIC GOOD is a good that is non-rivalrous and non-excludable. Consumption of the good by one individual does not reduce the amount of the good available for consumption by others;
BUDGET-MAXIMIZING MODEL argues that rational bureaucrats will always and everywhere seek to increase their budgets in order to increase their own power, thereby contributing strongly to state growth and potentially reducing social efficiency. This is an influential new stream of public choice theory and rational choice analysis in public administration inaugurated by William Niskanen, in 1971.
RENT SEEKING occurs when an individual, organization, or firm seeks to make money by manipulating the economic and/or legal environment rather than by making a profit through trade and production of wealth. Eg,: A farm lobby that seeks tariff protection or an entertainment lobby that seeks expansion of the scope of copyright.
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