A project conceptualised in 1987 with a estimated cost of Rs. 50 crore, finalised sometime in late 90s for Rs. 400 crore and planned to be opened for public in 2004, finally got completed in 2009 for cost of Rs. 1600 crore. This is a brief story of bridge commonly known as Bandra Worli Sea Link in Mumbai, Maharashtra, India.
I started my professional career in Oct 2003 with a company called Marico in its office at Bandra. I used to drive on my two-wheeler 13 kms one way (from my home) to office which took 30-45 minutes. While I joined the company I had people telling me “few more days and you would take 15 minutes as this bridge gets completed in 2004”. I was waiting for that day and the day finally arrived in Jul 2009. A bit late, I had already left Marico by then, did my MBA from ISB and then joined Aditya Birla Group. What a co-incidence, I waited for 5 years to use that sea-link and the bridge got delayed exactly for that period. On a lighter note, even if it were open before I left Marico, I would not have been able to use it, because I use a two wheeler and it is not allowed on the sea-link.
The bridge was inaugurated recently with much hype. Many big names were invited for the inauguration and it included the president of ruling party, the prime minister of country, former chief minister if state and others. This despite knowing that we have made a structure costing 4 times more than its projected cost and taking twice the budgeted time.
So what does this mean? Have we provided an in principle approval for all such infrastructure projects to over run its budgeted cost by few times and get delayed in implementation by few years. The media coverage and the praise that the inaugural ceremony received were really surprising. If we build all our infrastructure projects at this speed, we would certainly be a different place to live in a few decades down the line. As per the website of this bridge; it is 5.6 km long and the expected benefit is Rs. 100 crore per annum savings in vehicle operating cost due to reduction in congestion in the existing roads and lower vehicle operating cost on the bridge.
With these statistics I am afraid of few questions that my son would ask me once he knows some basic mathematics which would be 3 years from now. I expect the following questions and do not have any answers:
• This is a brilliant piece of engineering dad. Your generation build a bridge of 5.6 kms on sea and spent Rs. 1600 crore for building the same. This would mean Rs. 285 crore per kms; isn’t that awesome. Can we check the cost per km of a bridge in some other countries to see how it matches with international standards? Ah, maybe I need to do some more searches on the internet.
• The cost you spent is Rs. 1600 crore and the benefit expected is Rs. 100 crore per annum. Hence assuming that these numbers are accurate you will take 16 years to recover the cost, is that correct? Yes dear but I am not sure if it was planned that way. My son is too young to understand the concepts of discounting and compounding and hence if we were to calculate a discounted payback it would be much more than 16 years.
The site also cites reduction in accidents as one of the benefits of this sea-link. Though I am not an engineer by qualification and hence may not be the right person to comment on this, but I fail to understand how a bridge can reduce accidents.
All in all there is only one conclusion that I can come at. This sea-link and its inaugural ceremony is a testimony to Indian politics on how to depict a shoddy performance as the most superlative one. If there is an award ceremony on eyewash of the decade, I am sure the sea-link would be on the top of that list. I would also sincerely request some of the most respectable politicians to stay away from such inaugural ceremonies as it suggests a stamp of approval from them which may not be their intention.
It’s time we need an execution commission instead of planning commission.
Thursday 6 August 2009
Sunday 26 July 2009
Air India – God save our Maharaja
Started in 1932 as Tata Airlines by J.R.D Tata, Air India was formed in 1953 when air transport industry was nationalised. Since then the Maharaja has been a household logo and a strong brand in itself. However since last decade a complete mismanagement of the organisation by its owner; government of India has led it begging for a ‘bailout’.
Some really foolish decision in the national carrier; Air India and Indian Airlines that would make even a layman raise eyebrow:
• There were 2 national carrier; Air India for international and Indian Airlines for domestic for more than 50 years, but we learnt about word called ‘synergies’ in 70s or 80s. Was there a need for distinction between domestic and international operators? Better late than never; finally there were some talks of merging both the national carriers which began sometime in 2000 which finally happened in 2007.
• In late 2005 a plan to re-brand Indian Airlines as India was rolled out. That is a big joke when one knows that we are going to merge both the national carriers and the identity of Indian Airlines is anyways going to be lost, why was there a need to re-brand. Further I travelled once in a rebranded Indian and the experience was no different from Indian Airlines. It was just a cosmetic change; something similar to what many public sector banks did a year ago (refer my post on re-branding public sector banks). I am sure that there was huge amount of money that was wasted in this process.
• The worth of new fleets ordered was more than the revenue of the entity. Now this is something that can never go well with any person. Though there has been big acquisition by large conglomerates in recent past; but they were exception than a rule. I am not sure if there was even a rough plan on how would the payment for these fleets by arranged?
These are just few examples that make us raise eyebrows on the governance structure of operations of national carriers which is now National Aviation Company of India Limited (NACIL); the parent company of Air India and Indian. There could be many more but these are enough to raise questions on the people managing the show. The minister who has been responsible has been continued for more than last half decade and now he is being asked to prepare a restructuring plan. Can someone tell me; what is the incentive that he gets by turning around this company? In fact the incentive is reverse; the poorer it performs the higher the bailout.
I am sure that we will see more losses than posted by any company historically in India unless we make it run like a private company and bring in some professional managers to turn it around.
The company has already posted Rs. 8,000 crores losses and there is some hue and cry in the parliament. However people in the parliament seem to be busier in protesting against some reality shows instead of focusing on thousands of crores of tax payer money going in drain.
Dear GOI, please bring in some person from industry like you did for Unique Identity Project; else only god can save our Maharaja.
Some really foolish decision in the national carrier; Air India and Indian Airlines that would make even a layman raise eyebrow:
• There were 2 national carrier; Air India for international and Indian Airlines for domestic for more than 50 years, but we learnt about word called ‘synergies’ in 70s or 80s. Was there a need for distinction between domestic and international operators? Better late than never; finally there were some talks of merging both the national carriers which began sometime in 2000 which finally happened in 2007.
• In late 2005 a plan to re-brand Indian Airlines as India was rolled out. That is a big joke when one knows that we are going to merge both the national carriers and the identity of Indian Airlines is anyways going to be lost, why was there a need to re-brand. Further I travelled once in a rebranded Indian and the experience was no different from Indian Airlines. It was just a cosmetic change; something similar to what many public sector banks did a year ago (refer my post on re-branding public sector banks). I am sure that there was huge amount of money that was wasted in this process.
• The worth of new fleets ordered was more than the revenue of the entity. Now this is something that can never go well with any person. Though there has been big acquisition by large conglomerates in recent past; but they were exception than a rule. I am not sure if there was even a rough plan on how would the payment for these fleets by arranged?
These are just few examples that make us raise eyebrows on the governance structure of operations of national carriers which is now National Aviation Company of India Limited (NACIL); the parent company of Air India and Indian. There could be many more but these are enough to raise questions on the people managing the show. The minister who has been responsible has been continued for more than last half decade and now he is being asked to prepare a restructuring plan. Can someone tell me; what is the incentive that he gets by turning around this company? In fact the incentive is reverse; the poorer it performs the higher the bailout.
I am sure that we will see more losses than posted by any company historically in India unless we make it run like a private company and bring in some professional managers to turn it around.
The company has already posted Rs. 8,000 crores losses and there is some hue and cry in the parliament. However people in the parliament seem to be busier in protesting against some reality shows instead of focusing on thousands of crores of tax payer money going in drain.
Dear GOI, please bring in some person from industry like you did for Unique Identity Project; else only god can save our Maharaja.
Friday 24 July 2009
Should you do MBA? too after having corporate exposure for half a decade?
Frankly speaking it is catch twenty two situation. There are many good things that we here from people who have done MBA and also broadcasted by various media channels. Few of them are it broadens perspective (gas), bigger network (most abused term), better job (correlation vs. causation), etc. As I have been crisp in mentioning the meaning of each of these term in bracket let me explain some of them and put down my views:
• Broadens perspective: This is what I said when I wanted to get in, after coming out did it proved right? Yes, it did, but it is individualistic and cannot be true for all. You have to really work to do this and any B school will only provide environment to you but it is finally you who have to take advantage of that and broaden perspective. I would like to quote my favourite Prof. Sanjeev Das here who really helped me do this well. While having a chat with him I asked him what should one look for while deciding the electives. He was apt and clear, “select only those subjects that help you think differently. The problems in this world are same but the solutions could be different. Take subjects that help you think through different solutions”. Bullseye, this is what I think will help broaden perspective.
• Networking: This is the most abused term and a reason for B school. Though I was also one of those who gave this as one of the reason to do MBA, it is now that I realise it was so baseless. In the craziness of networking you will see people doing crazy things to get noticed and hence increase their network. Also with the current plethora of social networking site, I feel this reason has lost its importance whatever little it had. You do connect with few good people but saying that I would do MBA to increase my network seems too immature for me.
• Better Job: Well this was certainly not the reason for getting into MBA for me. But there is a confusion of correlation vs. causation as I have mentioned. There is a high correlation between doing MBA and getting good job, (by the way what is a good job) but good job is not a cause of MBA. People do get good jobs even without MBA. The reason for getting better jobs in the last decade was not MBA but the economic scenario that supported it. However as the tables turned and the scenario was not as good as it had been, things looked sad at all the B Schools. Hence B Schools would help you get a better job is a flawed argument.
Hey, wait there... though I have listed some reasons which I think are incorrect for doing an MBA, there are some reasons why I think MBA makes sense.
I will first put a quantitative reasoning for doing MBA, this would certainly make my economics professors happy.
• Reason 1: There would be more than 2 Lac CAs and more than 1 Lac MBAs (from premier B Schools) in India. However there would be less than 1000 people who are both. Now the choice is yours, whether you are happy being a part of 2 Lac CAs or a part of 1000 CA+MBA.
• Reason 2: Doing an MBA after getting good under-grad degree and a decent work experience sends signal to the outside world that you are serious about your career and better of the lot. It’s like a guarantee / warranty that manufacturers give on their product to signal that their product is better.
Now some gas, which I am really not good at. I have never experienced a campus life and hence doing MBA gave me a taste of campus life where you interact with people from difference background. I enjoyed my stay and learnt a lot from peers and professors whom I would have never met otherwise. I feel this is very important, but difficult to describe why at this stage, maybe once I work for few more years I would be in a position to mention the reason.
Coming to another question of ISB vs IIM, well my view would be its up to you. It is important to select a good B school whichever it may be will not have material impact on the objective.
Few professors from whom I learnt a lot and would certainly remember for life were Prof. Sanjeev Das, Prof. Prashant Kale, Prof. Dishan Kamdar, Prof. Henry Moon, Prof. Shamika Ravi and Prof. Subra.
Few colleagues that were great peers to have at ISB; Amit Uncle and Dilpreet Singh my study group mates and our dear neighbours and block mates Suketu Shah, Sandeep Gupta and Vikram Garg.
This post would be incomplete without mentioning the name of one important person who was my pillar, she is none other than Jinal; my friend and also my wife who put her career at stake and supported me all the time. I owe a lot to her.
• Broadens perspective: This is what I said when I wanted to get in, after coming out did it proved right? Yes, it did, but it is individualistic and cannot be true for all. You have to really work to do this and any B school will only provide environment to you but it is finally you who have to take advantage of that and broaden perspective. I would like to quote my favourite Prof. Sanjeev Das here who really helped me do this well. While having a chat with him I asked him what should one look for while deciding the electives. He was apt and clear, “select only those subjects that help you think differently. The problems in this world are same but the solutions could be different. Take subjects that help you think through different solutions”. Bullseye, this is what I think will help broaden perspective.
• Networking: This is the most abused term and a reason for B school. Though I was also one of those who gave this as one of the reason to do MBA, it is now that I realise it was so baseless. In the craziness of networking you will see people doing crazy things to get noticed and hence increase their network. Also with the current plethora of social networking site, I feel this reason has lost its importance whatever little it had. You do connect with few good people but saying that I would do MBA to increase my network seems too immature for me.
• Better Job: Well this was certainly not the reason for getting into MBA for me. But there is a confusion of correlation vs. causation as I have mentioned. There is a high correlation between doing MBA and getting good job, (by the way what is a good job) but good job is not a cause of MBA. People do get good jobs even without MBA. The reason for getting better jobs in the last decade was not MBA but the economic scenario that supported it. However as the tables turned and the scenario was not as good as it had been, things looked sad at all the B Schools. Hence B Schools would help you get a better job is a flawed argument.
Hey, wait there... though I have listed some reasons which I think are incorrect for doing an MBA, there are some reasons why I think MBA makes sense.
I will first put a quantitative reasoning for doing MBA, this would certainly make my economics professors happy.
• Reason 1: There would be more than 2 Lac CAs and more than 1 Lac MBAs (from premier B Schools) in India. However there would be less than 1000 people who are both. Now the choice is yours, whether you are happy being a part of 2 Lac CAs or a part of 1000 CA+MBA.
• Reason 2: Doing an MBA after getting good under-grad degree and a decent work experience sends signal to the outside world that you are serious about your career and better of the lot. It’s like a guarantee / warranty that manufacturers give on their product to signal that their product is better.
Now some gas, which I am really not good at. I have never experienced a campus life and hence doing MBA gave me a taste of campus life where you interact with people from difference background. I enjoyed my stay and learnt a lot from peers and professors whom I would have never met otherwise. I feel this is very important, but difficult to describe why at this stage, maybe once I work for few more years I would be in a position to mention the reason.
Coming to another question of ISB vs IIM, well my view would be its up to you. It is important to select a good B school whichever it may be will not have material impact on the objective.
Few professors from whom I learnt a lot and would certainly remember for life were Prof. Sanjeev Das, Prof. Prashant Kale, Prof. Dishan Kamdar, Prof. Henry Moon, Prof. Shamika Ravi and Prof. Subra.
Few colleagues that were great peers to have at ISB; Amit Uncle and Dilpreet Singh my study group mates and our dear neighbours and block mates Suketu Shah, Sandeep Gupta and Vikram Garg.
This post would be incomplete without mentioning the name of one important person who was my pillar, she is none other than Jinal; my friend and also my wife who put her career at stake and supported me all the time. I owe a lot to her.
Sunday 24 May 2009
Life after ISB
What a year it was... and experience worth having. At first it seemed like life came at stand-still... we were running at the peak speed and suddenly got in a slow train!!!
I had a 2 months break from April to May before I joined Aditya Birla Group from June 1st in their leadership programme. All the planning was in place for visiting to Kutch, then going to Thane for attending KP’s wedding for couple of days, then heading to a silo in Vipassana, post that going to Koregaon – Mahabaleshwar – Thoseghar, finally going to Nageshwar. Wanted to go to Shirdi but that did not happen as Moulik was not well.
Felt like writing about each journey but skipped that idea as it would be too boring. But certainly felt great after ISB. The first change was no internet, no email and no work. What a relief it feels when you have all the time at your disposal. At times you also feel that internet and email have done more harm than benefit. I really felt at bliss not checking emails except when it came from ABG (and that too courtesy Aditya Satpute who informed me whenever there was a mail). But certainly we missed ISB, more than me Jinal missed it a lot. You get addicted to the atmosphere at ISB and is a bit difficult to come to reality after a year there.
A standard question after ISB was should you do MBA after doing CA and having five years of work experience? The answer would be a bit long and hence I have made a separate post.
All in all ISB was a refreshing break for one year.
I had a 2 months break from April to May before I joined Aditya Birla Group from June 1st in their leadership programme. All the planning was in place for visiting to Kutch, then going to Thane for attending KP’s wedding for couple of days, then heading to a silo in Vipassana, post that going to Koregaon – Mahabaleshwar – Thoseghar, finally going to Nageshwar. Wanted to go to Shirdi but that did not happen as Moulik was not well.
Felt like writing about each journey but skipped that idea as it would be too boring. But certainly felt great after ISB. The first change was no internet, no email and no work. What a relief it feels when you have all the time at your disposal. At times you also feel that internet and email have done more harm than benefit. I really felt at bliss not checking emails except when it came from ABG (and that too courtesy Aditya Satpute who informed me whenever there was a mail). But certainly we missed ISB, more than me Jinal missed it a lot. You get addicted to the atmosphere at ISB and is a bit difficult to come to reality after a year there.
A standard question after ISB was should you do MBA after doing CA and having five years of work experience? The answer would be a bit long and hence I have made a separate post.
All in all ISB was a refreshing break for one year.
Friday 24 April 2009
Term 8
Prof. Shamika Ravi, ISB
Business Law – Prof. Sumesh Reddy, DRL
Strategic Innovation Management – Prof. MB Sarkar, Fox School of Business and Prof. Anand Nandkumar
Business Law – Prof. Sumesh Reddy, DRL
Strategic Innovation Management – Prof. MB Sarkar, Fox School of Business and Prof. Anand Nandkumar
Tuesday 24 February 2009
Term 7
Cases in Corporate Finance – Prof. Suren Mansingka, University of California
Change Management – Prof. Ramnarayan, ISB
Economics of Strategy – Prof. Louis Thomas, Wharton
Change Management – Prof. Ramnarayan, ISB
Economics of Strategy – Prof. Louis Thomas, Wharton
Tuesday 3 February 2009
Warren Buffet's advice for 2009
This was shared by Chandan (ISB Co2009), found it very useful... Happy reading...
We begin this New Year with dampened enthusiasm and dented optimism. Our happiness is diluted and our peace is threatened by the financial illness that has infected our families, organizations and nations. Everyone is desperate to find a remedy that will cure their financial illness and help them recover their financial health. They expect the financial experts to provide them with remedies, forgetting the fact that it is these experts who created this financial mess.
Every new year, I adopt a couple of old maxims as my beacons to guide my future. This self-prescribed therapy has ensured that with each passing year, I grow wiser and not older. This year, I invite you to tap into the financial wisdom of our elders along with me, and become financially wiser.
* Hard work: All hard work bring a profit, but mere talk leads only to poverty.
* Laziness: A sleeping lobster is carried away by the water current.
* Earnings: Never depend on a single source of income. [At least make your Investments get you second earning]
* Spending: If you buy things you don't need, you'll soon sell things you need.
* Savings: Don't save what is left after spending; Spend what is left after saving.
* Borrowings: The borrower becomes the lender's slave.
* Accounting: It's no use carrying an umbrella, if your shoes are leaking.
* Auditing: Beware of little expenses; A small leak can sink a large ship.
* Risk-taking: Never test the depth of the river with both feet. [ Have an alternate plan ready ]
* Investment: Don't put all your eggs in one basket.
I'm certain that those who have already been practicing these principles remain financially healthy. I'm equally confident that those who resolve to start practicing these principles will quickly regain their financial health.
We begin this New Year with dampened enthusiasm and dented optimism. Our happiness is diluted and our peace is threatened by the financial illness that has infected our families, organizations and nations. Everyone is desperate to find a remedy that will cure their financial illness and help them recover their financial health. They expect the financial experts to provide them with remedies, forgetting the fact that it is these experts who created this financial mess.
Every new year, I adopt a couple of old maxims as my beacons to guide my future. This self-prescribed therapy has ensured that with each passing year, I grow wiser and not older. This year, I invite you to tap into the financial wisdom of our elders along with me, and become financially wiser.
* Hard work: All hard work bring a profit, but mere talk leads only to poverty.
* Laziness: A sleeping lobster is carried away by the water current.
* Earnings: Never depend on a single source of income. [At least make your Investments get you second earning]
* Spending: If you buy things you don't need, you'll soon sell things you need.
* Savings: Don't save what is left after spending; Spend what is left after saving.
* Borrowings: The borrower becomes the lender's slave.
* Accounting: It's no use carrying an umbrella, if your shoes are leaking.
* Auditing: Beware of little expenses; A small leak can sink a large ship.
* Risk-taking: Never test the depth of the river with both feet. [ Have an alternate plan ready ]
* Investment: Don't put all your eggs in one basket.
I'm certain that those who have already been practicing these principles remain financially healthy. I'm equally confident that those who resolve to start practicing these principles will quickly regain their financial health.
Sunday 4 January 2009
Term 6
Financial Engineering - Prof. Sanjeev Das, SCU and Prof. Ramaswamy, Wharton
Private Equity - Prof. Amit Bubna, ISB and Vinay Nair, ADA Invst Mgmt.
Property Finance - Prof. Piyush Kumar, Univ of Aberdeen
Strategic Performance Mgmt. - Prof Dhinu and Prof. Nandu, Pittsburgh
Private Equity - Prof. Amit Bubna, ISB and Vinay Nair, ADA Invst Mgmt.
Property Finance - Prof. Piyush Kumar, Univ of Aberdeen
Strategic Performance Mgmt. - Prof Dhinu and Prof. Nandu, Pittsburgh
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