"Be sure to lay wide streets planted with shady trees, every other of a quick growing variety. Be sure that there is plenty of space for lawns and gardens. Reserve large areas for football, hockey and parks. Earmark areas for Hindu temples, Mohammedan mosques and Christian churches."
Jamsetji Nusserwanji Tata on the formation of Jamshedpur.

It's the new kid on the Tata block. Actually, it's been around for a long time-a hundred years almost-but it was only on August 25, 2003, that it came out of its mother's womb as an independent entity. The umbilical cord is still in place, and it will still be some time before it breaks totally free.

Just in case you're wondering what we're talking about, it's JUSCO (Jamshedpur Utility and Services Company), which, till a few months ago, was Tata Steel's town planning and management services division and is now a 100 per cent subsidiary of the steel company. "Tata Steel has been managing Jamshedpur since 1907 and has had as much experience in civic management as in making steel, but had not leveraged this competency for commercial gains," says Sanjiv Paul, Managing Director of JUSCO, and the man charged with turning an erstwhile cost centre of the steel behemoth into a profit centre in its own right.

End of Utopia: Everything from water and education to road and hospital has been, or will be privatised in the township

So what changed? And why is an old dog having to learn new tricks to survive? "We believe that there's a huge opportunity for the private sector in managing public utilities like power, water and civic amenities. Power is already a big play nationally. Water and civic amenities are the next big opportunities. And if you throw in our expertise in town planning, construction, education, healthcare, horticulture management and vector control, we're the only company in the country that can offer integrated civic management services on a turnkey basis," Paul says. "We want to position ourselves to take advantage of any opportunities that might emerge in this sector."

STEEL CITY GETS STEEL HOUSES

Safe as steel: JUSCO's architectural head J. Singh in front of his house A house made of steel? what's new about it, one might ask. Well, lots, actually. For one, it doesn't use a single brick in its construction. There's no wood either. The entire structure is built of special trapezoidal steel sheets with thermocol insulation and cement fibre board cladding on the outside. "It's much lighter than conventional brick and mortar construction per unit of area," says Jatinder Singh, Head (Architecture, Planning, Engineering and Construction), JUSCO, who designed two steel houses and lives in one of them. The doors, windows and wardrobes are also made of steel sheets. The technology for these houses has been provided by Minaean Building Solutions Inc. of Canada. "We feel this material will revolutionise the construction industry and totally change its dynamics in future," adds Singh. Only the plinth area is made of conventional concrete, but since the superstructure is much lighter than brick and mortar construction, the foundation needs less of materials and is, therefore, cheaper. Ease of construction is another huge plus: it takes only three months to construct such a house as opposed to 9-12 months for a conventional house. The panels are made off-site and are pieced together on-site like pre-fab houses. Since it doesn't require any mixing, like cement and concrete, the entire process is dry, non-messy and eco-friendly. Besides, it costs the same as compared to houses built of conventional materials. "The thermocol insulation ensures that the house is 3 degrees cooler in summer and 3 degrees warmer in winter," says Singh. The technology can support houses up to four floors high. "The best part is that these houses are resistant to earthquakes measuring up to 7-plus on the Richter scale," Singh points out.

Also, Tata Steel was spending upwards of Rs 100 crore a year on providing these services-even during the dark days of the late nineties and early 2000s when its P&L account had large blotches of red. "The top Tata management spent considerable time pondering over the issue. Such a huge expenditure was clearly weighing down Tata Steel's balance sheet, especially as competitors had no such crosses to bear. At the same time, the Tatas had nurtured Jamshedpur for close to a century and it was almost like a covenant between the town and the group," says Sanjay Choudhry, Head (Corporate Communications), Tata Steel. "And that's how JUSCO was born; as a means of reducing the burden on Tata Steel's books while at the same time continuing to provide the services we've always provided in a financially viable manner."

But that doesn't mean that the Tatas are abandoning the residents of Jamshedpur. Tata Steel will continue to subsidise the operations of its newborn till it learns to stand on its own feet. The process involves having to develop a market orientation. Not an easy task for an organisation that has provided free services for all of its nearly 100 years of existence. "We're going through a learning process," says Paul, "and we have to develop a business acumen." "It's a cultural transition that we have to go through before we emerge as a full fledged market-oriented organisation," adds Dhananjay Mishra, Chief (Integrated Customer Services). "We now have to bill customers for services provided by the 10th of every month. That's quite a change from times in the recent past when billing was done once a year."

JUSCO is also bidding for contracts to manage townships owned by other companies both within and outside the Tata Group. It has already taken over the Indian Steel Wire Products (ISWP) township in Jamshedpur and will soon take over the operations of the Tinplate, TRF and Tata Motors townships and the local National Institute of Technology colony. It is also in talks with ONGC to manage one of its townships in Assam. Projected turnover for the first year is about Rs 100 crore, but the company is aiming high. "Construction, power and water will be the vehicles of growth," says Paul. In this context, he informs that JUSCO has recently entered into a contract with Minaean Building Solutions Inc. of Canada to develop steel housing (see Steel City Gets Steel Houses). This technology has the potential of revolutionising the construction scene in the country and can catapult Tata Steel's fledgling offspring into the upper reaches of the group's pecking order.

"We're the only company in India that can offer integrated civic management services on a turnkey basis" Sanjiv Paul MD/JUSCO

The company has bid for a Rs 4,000-crore-plus Jharkhand government contract to provide mass housing. If it wins the six-year deal, turnover will immediately leapfrog six to seven times at one go. JUSCO also sees itself as the national water company of the future even though electricity is its cash cow now. The projections for the first year are profitable but the company will have to spend money creating new infrastructure, which will bring down its book profits. "There's fantastic scope for growth in this business," says Ruchi Narendran, former marketing pro at Tata Tea, and independent consultant retained by JUSCO to help it formulate a marketing strategy. "Right now, we deal with Tata Steel and other corporate customers on a b2b basis. But we will definitely enter the b2c segment in future," she says.

But before that happens, Paul is looking to beef up his balance sheet and improve his bench strength. "We have to recruit quality people and bring them into the Tata culture. That takes time and can be a bit of a struggle at times but that's the challenge we have to face," says Paul. He's quite bullish about the future, though. And he's confident that a year-and-a-half down the line, he can apply for the Group Composite Mark (GCM), the distinctive Tata logo that most of the big group companies sport. "Group companies can't lay claim on the Tata logo as a matter of right," explains Tata Steel's Choudhry, "it has to be earned and companies have to attain a minimum size, run a business of consequence and also satisfy stringent business excellence parameters before applying for the GCM."

If that happens, as everyone in JUSCO is confident it will, then Paul can bask in the satisfaction of having taught a really old dog some pretty smart tricks.