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Hyderabad: Hyperabad Deflated It's home to India's first international business school, Microsoft's development centre, and some of the best names in biotech and pharma. Still, the Cyberabad that the state's live-wire CEO Nara Chandrababu Naidu built is today held hostage by the city's over-worked infrastructure. By E. Kumar Sharma
January 1999. Andhra Pradesh Chief Minister N. Chandrababu Naidu unveils his Vision 2020 for the state. Among the promises: six-lane roads in all cities; four-lane highways along 'growth corridors'; power generation capacity of 36,000 mw; an international airport; and a 15-fold increase in teledensity. November 2001. With no milestones to guide them, the state agencies have just about got down to drawing up a new blueprint for the city roads. Consultants for the proposed multi-modal transport system are yet to be finalised. While the land and preferred bidders for the international airport have been identified, a state-level committee is still to work out the financing of the project. Installed power capacity stands at 8,283 mw, but transmission losses are a staggering 30 per cent. And while Hyderabad claims to have the highest teledensity, fact is, Chennai may be doing better on that count.
Goodbye, Hyperabad. Hello again, Hyderabad. None of BT-Gallup's top cities has slid as much as the city of the Charminar. From being number three in our previous survey, Hyderabad has slithered four places down. A clarification is in order here. Like we have mentioned elsewhere, the survey methodology has been tweaked a bit. Respondent perception isn't the only measure. There is a large dose of realism in the form of objective data relating to the city's infrastructure. And that has proved to be Hyderabad's undoing. Consider this: While its perceptual rank stays unchanged at number three, its factual rank comes up in the rear at 20. When weighted, the final score works out to seven. So, is the city attracting business faster than it is growing its infrastructure? Apparently. Since the mid-90s, the state has added 2,172 mw of power, but industry analysts say a shortage of 10-12 per cent still exists. Piped water supply to homes averages just 2 hours every alternate day in some parts of the city. Although the city's roads are among the cleanest in the country, they are adding one lakh two-wheelers ever year. At last count, the two-wheeler population stood at 11 lakh in a city of 63 lakh people. The total load of air pollutants has soared from 491 tonnes per day five years ago to 1,200 tonnes per day at present. The peak pollution levels are even more worrying. The respirable suspended particulate matter (RSPM)-fine particles of smoke that are absorbed by the lungs-is around 200 micrograms per cubic meter, which is double the ideal limit. ''There could have been a better sequencing of growth in the city,'' feels Varaprasad Reddy of Shanta Biotechnics.
That, or may be the state is growing its infotech business at the cost of others. In fact, that's a pet peeve of those who are not into it in Hyderabad. Naidu himself, however, has a broader vision for the state. His Vision 2020 calls for focus on three kinds of industries: knowledge-based, including it, biotechnology and pharma; resource-based, meaning mining, construction and agro-processing; and labour-intensive, such as garments and leather products. The problem? ''The focus so far seems more towards the white-collar sections and not so much manufacturing, which actually creates growth prospects from all strata of society,'' says Ajay Pandey, coo, Tata Teleservices, which offers basic telephony services in Hyderabad. Problem Of Plenty In IT Others agree that the pattern of industrialisation in the state isn't perfect. ''(Because of) the fact that (Hyderabad) does not have well-spread out and representative units such as FMCG or other major manufacturing facilities, attracting talent becomes a big problem,'' points out Satish Reddy, Managing Director and coo, Dr Reddy's Lab. In Reddy's own case, nearly a third of the senior level executives recruited recently came from outside. Even in it not all is hunky-dory. Take, for example, the industry's lifeline: telecommunications. While teledensity per 100 people since 1996 has more than doubled to 9.4 in 2001, it is still lower than Bangalore's 13, and Chennai's 13.7. The city's official figure for teledensity is 14.66 per one hundred. But Pandey of Tata Tele says that's not an apple-to-apple comparison, as the figures relate only to the city's municipal limit and do not include the Ranga Reddy district, which is very much a part of Hyderabad today. Another criticism about the city's business climate has to do with the manner in which local entrepreneurs seem to cotton on to a boom sector only to suffer in a bad downturn. At the peak of the bulk drug boom, there were some 350 manufacturers in the state, most of them located in and around Hyderabad. Today, there are only 250 of them. Its most famous fad, however, has been software. Between 1990 and 2000, more than 1,000 software firms set up shop. But since January this year, at least 50 units have shuttered and another 150-odd are defunct. All eyes are now on biotech. ''The problem is that many of the city's ventures, at least in software, have been start-ups,'' points out Srini Raju, CEO of I-Labs. ''And when opportunities dried up, they were hit before they had a chance to stabilise.''
The city's pride, Hi-Tec City, has achieved full occupancy, and including facilities of some stand-alone companies like Wipro, Infotech Enterprises, and the Vanenburg it Park, the Infocity is believed to be generating software exports worth Rs 750 crore. CEOs in Hyderabad love Naidu for the kind of access he provides them, and the way he's tried to de-bottleneck infrastructure problems. For example, power supply failures have been minimised by setting up load distribution centres. Like Chennai, Hyderabad has built flyovers, but unlike Chennai, it is yet to start work on a mass rail transport system. Noble intentions and piece-meal work do not quite make up for the high cost of infrastructure. Take, for instance, power. Even in Hi-Tec City, the per unit cost of electricity works out Rs 4, versus Rs 3.90 in Tidel Park, Chennai. Units outside the Hi-Tec City have to fork out even more. The tariff slab in commercial areas in Hyderabad ranges between Rs 3.40 per unit and Rs 7.45 per unit. Chennai's, in contrast, ranges from Rs 2.60 to Rs 5.50 per unit.
Sure, the state offers 25 per cent concession on power to it companies, but the benefits aren't percolating down. ''(Concessions) don't happen in reality mainly because of some procedural issues like metering problems in complexes not owned by companies,'' says J.A. Chowdary, President, Hyderabad Software Exporters' Association. Apparently, the government is sorting out the procedural issues. Water is another sore point. Currently, there is a shortfall of 30 million gallons per day, given a supply of 170 MGD. The situation is grim enough for the opposition Congress party to try and mobilise people against the ruling Telugu Desam Party and ask for a ''water regulatory commission''. ''If the government has raised charges on utilities, it is because it has little choice given its limited resources,'' notes K.S. Raju, Chairman of the Nagarjuna Group. Raju, however, adds that it is time the state did away with its urban land ceiling regulations and introduced laws for the balanced growth of the city. Still, if there is hope of the city bouncing back up on the rankings, it is because it has what no other city on our list has: Nara Chandrababu Naidu. |
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