Thursday, March 20, 2008

Viva Singapore!

It's been a while since I wrote my last post. Those of you who have been wondering if I have given up the ghost or, at the very least, given up blogging can rest easy. The reason being that I was off with my better half for a belated but much-cherished second act of marriage - the honey-moon! We spent some of the last ten days or so in Singapore, Penang, Phuket and Kuala Lumpur, and the rest on a delightful lil' ship called the Super Star Virgo.

Though I didn't have much spare time for musing, the trip did get me thinking about the remarkable transformation that Singapore and, to a lesser extent, Malaysia have undergone in the last three decades.

In the 1950s and 60s, Singapore and Malaysia would have been hard to distingush from the Trivandrum of those days. In fact, in many ways - like having a modern bus transport system, sewerage system and so on, Trivandrum would have ranked a little above them. Hardly a few decades later, Singapore and Kuala Lumpur have left our pretty, little city far behind. Today there is little to distingush them from New York or London. In some ways, like in the case of Singapore's world beating metro rail system, they have overtaken those metropolises.

While it is easy to be amazed by the progress made by these countries, there are valuable lessons to be learned by us. After all, that is the real essence of success, what others can learn.
There are a few key things that these nations have done which have been critical in their achieving progress in just three decades what took most developed nations the better part of a century. Understanding these key strategies could help Trivandrum mimick this meteoric rise (we will talk mainly about Singapore, although many of the points apply to Malaysia as well) :

* Strategic use of Location: Singapore marks the dividing line between Indo-Arabia and East Asia, which together encompass the lion's share of the world's tradable oil supply, half its population and three of the its most powerful nations - India, China and Japan. Situated on the vital Malacca Straits which is a choke-point on the world's West-East trade route, Singapore was ideally placed to tap into the vast stream of commerce passing through here. Initially, the island state focussed on developing manufacturing capabilities, turning incoming raw material into finished material. So oil coming from the middle-east was refined and sent to economies across the region, while cheap subcomponents coming from East Asia were turned into sophisticated goods which were exported to Indo-Arabia and Europe.

Singapore had access to the plentiful labour of the surrounding, less developed region. This included India, Malaysia and Indonesia. Using a combination of this cheap manpower and technologically advanced manufacturing, Singapore rose to prominence as a manufacturing hub along with Taiwan.

Later, the port also discovered another facet of its location - its suitability as a transshipment hub. Straddling one of the world's busiest shipping lanes and blessed with a relatively deep harbour, it took advantage of the relative lack of draft in harbours elsewhere in the region. The principle of transshipment is simple, it is based on the fact that the cost of carrying cargo declines with the increase in size of the ship, economies of scale. However, big ships - like supertankers and super container carriers - can only enter deep ports, with depths of 18 m or more. Till recently, there were very few ports with such drafts in Asia. Except Singapore. Effectively utilising this fact, Singapore has rapidly become the world's busiest container port. The Port of Singapore handles almost 30 million containers a year. A lion's share of India's container traffic is transshiped through Singapore.

Looking at the flood-lit expanses of quay cranes, giant ships and endless stacks of containers which make up the port's multiple container terminals, it is not hard to believe that this port controls the pulse of the trade of many nations, including India.

Ever on the move, Singapore has now added cruise operations to its list of specialities. My own voyage started there, on board the 80,000 ton Super Star Virgo - a mighty cruise ship, which is one of a host which operate out of or dock at Singapore's Cruise Terminal. With its long, beautiful coastlines, huge population and traditional tourist spots, it does not take rocket science to figure out that Singapore has another winning idea.

It doesn't take even bullock cart science to realise that Trivandrum occupies a similar location to Singapore. Indeed, in many ways, our location is superior to that of Singapore. Just take two key aspects. First, in terms of transshipment, Trivandrum lies on the main shipping routes - just like Singapore - but has deeper draft (18 - 25 m) and is much closer to Indian ports. For example, a container travelling from Bangalore via Cochin to the US has to be hauled on a smaller vessel (< style="font-weight: bold;">* Strong, Far-sighted Planning: Most observers would have been mystified at the massive construction projects undertaken for the Changi Airport or the Port of Singapore at the time they were started off. Few would have understood the horizon that the planners were aiming at, not a few years thereafter but a decade or two ahead, when Changi is one of the region's busiest and the world's best airport or when the Port of Singapore is the world's busiest port. Even today, as Singapore reclaims more of the Marina Bay, it may be a little hard to comprehend that the project is in expectation of Asia becoming the world's economic powerhouse, with twin engines in India and China.

* Far-sighted and Strong Urban Management: Urban planning cannot look five years into the future or even ten. It needs to look atleast twenty or twenty-five years ahead. The reasons are simple, urban development projects typically take atleast ten years to complete, given their scale and complexity. They are extremely integral to society, where fundamental changes can take an entire generation to occur. Major developments like a township may take many years to manifest all their effects. For example, when Changi Airport came up, little was understood about the myriad townships and business parks which would come up close to it, yet the Metro and other infrastructure was planned with that in mind.

Far-sighted planning has to be combined with strong management and execution. Often, the development of Singapore has been at odds with some of its people, such as those due to lose their homes to a Metro expansion or a new building development. In most cases, development has won out. The benefit for the greater number is the driving force behind such often unpopular decisions. The increased convenience to hundreds of thousands of people using a new Metro Line is felt to offset the heartbreak of a dozen families who have to leave their old homes. Not that it is the Chinese way of development - where you find out your home is supposed to be demolished for a new road when the wrecking ball comes crashing in through your bedroom window at 3 AM! Amazing though the dragon's progress has been, such bulldozer tactics are not to be condoned. There is every reason to take care of rehabilitation before moving in with the wrecking crew. But the key thing is that projects should go ahead if the cost-benefit analysis makes sense, even after the social costs are factored in. A straight road should not end up as a squiggle due to "social" or "political" consideration.

In Trivandrum, the first step to implementing this way of doing things is to have a strong planning and execution authority. Something which has the scope and powers of TRIDA, the District Administration and the City Corporation, and the efficiency of a private corporation. As mentioned in an earlier post, this can be achieved by creating a new centralised planning agency which is conferred sufficient autonomy under the aegis of a special developmental area - the Trivandrum Capital Region - which in its current definition has slightly more area than the island of Singapore.

The next step is to give it a professional executive structure merged with a democratic legislative body. To those of us who would like to deep-six the legislative, it is a near impossibility, and a good thing too - especially in view of what is transpiring in China, or rather Tibet, these days.

Not that it is a totally foreign concept to Kerala. Recently, the KSEB brought out a new masterplan for Trivandrum in which they have factored in the growth of Technopark and Vizhinjam. Glad to see someone's reading the newspapers already!

* Effective Combination of Public and Private Funding - Singapore rejuvinated its cash strapped economy, at the time of independence from British rule, through tight fiscal control and by attracting external investment. In the beginning, much of it came from regional businesses - Malay and Chinese before the fame of Singapore as an attractive business destination grew and investment came in from across the globe. Much of the Government's own investment has gone into infrastructure which facilitates further investment.

This kind of investment can be seen as a multiplier, since it facilitates other inflows which are many times greater. Simple recipe, take a deserted part of the island. Reclaim some land, level some more. Add some roads, electricity and other utilities. Create a semi-autonomous administrative body for it. Invite investors and stir well till it simmers. Voila! You have a new industrial township from which you can collect millions of dollars of tax and recoup your initial investment many times over. Not that this is unique to Singapore, it has been successfully practised in many developed economies. And the latest additions being China and Dubai, both on mega-scales. The unique thing about Singapore is that much of the private capital pumped has not been so private - a major share comes from Government controlled investment vehicles like Temasek. Thus the income generated from the initial investments has been ploughed back in to create even more wealth. The money that money makes, makes more money......well you get the general idea. Singapore's Temasek and Ascendas are major global players in the property Perhaps the only other place where the Government is such a large realty player is in Dubai, where real estate behemoths like Emaar and Nakheel are under State control. But then again, Dubai had more money to begin with and it remains to seen whether its grandiose developments can emulate the success of Singapore.

It does not easily dawn on policy makers that direct investments such as building IT parks or LIG housing will have minimal multiplier effects. In the case of the former, the inflow may spawn a few apartments and restaurants. But if the investment is made in the basic infrastructure for a new township, it may catalyse many times more investments. For example, if the Govt. of Kerala invests Rs 300 Crores in an IT building, it may create about 1.5 million sq.ft of space and about 15,000 jobs. But when the same amount is invested in acquiring land for and creating the basic infrastructure for an IT-based integrated township (in this case Technocity), it can bring in over Rs 6000 Crores of private investment and create 150,000 direct employment opportunities. The revenues to the Government and the benefit to the citizens of Kerala are much more in the latter case. In this sense, the new Public Private Partnership-friendly policy of the Kerala Govt. is welcome, heralded by the Technocity project and the formation of the two investment vehicles - INKEL and Kerala Information Technology Infrastructure Ltd (ITIK) - which will fund the basic infrastructure for major projects across Kerala.

Specifically for Trivandrum, there needs to be an agency which can raise funds for developmental projects and also raise capital on its own. One way of doing this is to identify and assign a land back to the agency which can be sold outright through action or used for Joint Ventures, to raise capital for various projects. While a good share of such capital must be used for socially beneficial schemes like low cost housing and so on, a major portion must be earmarked for projects which create further value like infrastructure development. The idea behind the agency's funding is quite simple, like in the Singapore model. Suppose, 100 acres of land are acquired at Thonakkal and given to the agency. Today, or rather four to five months ago, the land is/was cheap. Now along comes Technocity at nearby Pallipuram, with the potential for 150,000 jobs. The land prices nearby go through the roof and the agency is sitting on top of a goldmine. Easy money to invest in more such projects. A tactic that urban development agencies like the MMRDA have been using to great effect for many years. Of course, this development agency must be empowered to plan, execute and manage its own projects. (Read more here.)

The good part is that there are already some positives about the lessons from Singapore. Atleast in a few places, those lessons are being learnt and even put into practice. There will undoubtedly be more innovative strategies that can be used to fast track Trivandrum's development, for no two cities are the same. But the two cities that we talked about - our own Ananthapuri and Singapore - have a lot in common and perhaps they may yet share a common future.

14 comments:

  1. Dear Ajay

    I like your blog.... I am looking at setting up an ecommerce business and Trivandrum looks like an interesting place potentially to locate the business.

    Would you mind if I asked some questions? My email is travel dot addict at hotmail dot com.

    thanks
    sam

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  2. The government being a bit more proactive would allow Trivandrum to grow a lot more. With a lot of companies interested in developing IT infrastructure, now would be the right time to start planning for land acquisition for companies that would be left out from TP-III and IV.
    The area between Kazhakoottam - Mangalapuram and Pothencode seems to have good potential: Once KSTP part I is complete, Kazhakootam- Pothencode- Venjaranmoodu will be a 4 lane road with Kinfra film and video park located on the sides. Part of the Technocity will be on the Mangalapuram - Pothencode Road.
    There should be land available along this strech in larger plot sizes. I am not sure who owns the Pothencode palace now, but that would make an ideal location for a mixed IT-Residential project. Furthur east along the roads to the MC road (connections to Vattapara, Venjaramoodu and Vembayam) there should be some large sized rubber estates, which once again would be easier to acquire.
    This would make a better IT corridor than the Trivandrum - Quilon one, since it is radial to the city, and also does not make the airport furthur away.

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  3. hi.. nice write up abt singapore.. like to know if we need a sez zone for technocity project and vizhinjam, how advantegeous it w'd be for us.. and now the channels are full of smartcity gettin the sez... im sick of it..

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  4. Sam - Great to hear that you are interested in setting up your business at Trivandrum. I will drop you a mail, please feel free to contact me for any help.

    Cheers!
    Ajay

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  5. Ram - Technocity will definitely be an SEZ, perhaps a collection of SEZs - including potentially a multi-service SEZ, only the third of its kind in South India. SEZs around the Vizhinjam port will also be a logical idea and if the Govt. does not do it, private developers surely will. Cheers!

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  6. You are spot on, Vinod, when you say that an IT Corridor can be a radial structure rather than a linear one to Kollam. The Mangalapuram - Pothencode road does indeed have large parcels of land available along it.

    In fact, I was thinking that the IT Corridor can be extended from Venjaramoodu via Nedumangadu to Balaramapuram. This will act as an Outer Ring Road which will close the loop between the two development hubs of the city - Technocity and Vizhinjam.

    However, extending the development corridor to Kollam will help increase the catchment area by tapping into another district.

    Looking forward to more thoughts from your side, Vinod.

    Thanks for all your comments, guys. Keep them coming.

    Cheers,
    Ajay

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  7. Ajay,

    The way that I look at it, Balaramapuram area might be best for increasing export related activities with its closeness to the Vizhinjam port: Kinfras apparel promotion parks would be great here, with Balaramapuram's history with the textile industry.

    The area around Karakulam-Nedumangaud would be ideal for expansion of Telecom and electronics related industry. Keltron has a large presence here, and if GoK could find the 100 acres needed for Brahmos expansion here, this could become the electronics/defense sector cluster. With IIST and IISc going to be in this area, and with Valiyamala ISRO in the mix, this could increase the potential of this.

    If NH - Pothencode - MC road - Nedumangaud becomes the IT cluster space, that would be space enough for a lot of expansion. The NH in this strech is from Kazhakoottam to Mangalapuram, and MC Road from Vattapara to Venjarumoodu. The good part about this area is that there are a lot of connecting roads (From Vetturoad, Kaniyapuram and Mangalapuram to Pothencode, from Pothencode and Nedumangaud to Vattapara, Vembayam and Venjarumoodu), with lots of large landholdings. With all of these near Andukonam powergrid corpn substation, electricity distribution subsystems could be easier to design and build.

    Within the city, Pattom - Kumarapuram - KIMS should be developed as a Medical corridor.

    ReplyDelete
  8. WOW Ajay! You rock man..Enjoying life to the fullest, like they say in an ad!

    Singapore & then the cruise!!!Mindblowing...I strongly suggest a travelblog to share your experiences around the world..:)

    Well man Vinod, you've just hit the right idea. An IT corridor deviating to the MC Road-Nedumangad parts seem fabulous. And an outer ring road to go with it...

    Bingo!

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  9. Thanks Vinod and Scorpio, for your feedback. I sometimes wish that our urban planners had half the vision of the bloggers who post here. Maybe it is time we prepared some sort of "Citizens' Master Plan 2015" and submitted it to the Government, I am sure at least 1 out of 20 suggestions may get implemented. One's better than nothing.

    Looking forward to all your comments on this idea.

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  10. Very nicely written. I've been a reader all through right from the 1st post. Wish someone in Achumama's govt takes at look at the suggestions that you and others have put froward in the posts and comments!

    Keep up the good work!

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  11. One site that I like is http://archboston.com/community

    A forum with different subsections will be great. One part of the forum should be posts from mods etc which are kind of "accepted" ideas to be forwarded.

    Subsections could be for industrial clusters, transit development, tourism development etc. It would be interesting to see how many people want a ship building yard in Poovar v/s tourism development. (the CDP proposed under JNNURM is really wierd: nobody who ever traveled in a bus in TVM would write that.

    Ideally, this could be a Kerala wide forum, if we do not get to the menace of cross posting etc. There are somethings that would be common for Kerala, like railway development etc.

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  12. hi ajay,

    just came across an article in fronline..
    http://www.hinduonnet.com/fline/stories/20080411250712200.htm
    check it out and if u c'd throw some light on it.. as usual media ignorance at its height.. just 2 sentences abt tvm...

    regards
    Ram

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  13. @ Ram - I read the articles. To be frank, I think the coverage of Trivandrum has been quite decent, compared with the usual stuff our media dishes out. Even in the IT/ITES section, most of the content is about Technopark and Technopark-based companies, although the customary coverage is given to Kerala's most trumpted, but still-on-paper project. The Hindu has consistently been the paper which has given the fairest picture of Trivandrum. Thank god, there is atleast one paper which thinks and writes straight. Thanks for pointing out the articles. Cheers!

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  14. I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Alena

    http://grantfoundation.net

    ReplyDelete

Thanks for your comment, I will take a look at it and put it up at the earliest.