1. Fixing infrastructure deficit in India: Know what they key enabler is

Fixing infrastructure deficit in India: Know what they key enabler is

Infrastructure is a key enabler for economic growth. Clearly, there is a huge infrastructure deficit in India. So, it's all about priority setting whether it is done at the Indian government level or state level

Published: July 24, 2017 4:46 AM
Infrastructure is a key enabler for economic growth. Clearly, there is a huge infrastructure deficit in India. So, it’s all about priority setting whether it is done at the Indian government level or state level

Global engineering and management consultants, Mott MacDonald have been in India for decades now. Having worked for projects like Delhi Metro, Jaipur smart city, it is now contemplating using more of Indian talent for global delivery centres. In conversation with Ishaan Gera, chairman of the enterprise Keith Howells discusses the company’s growth, sustainable infra focused spending and the challenges that the economy faces. “I haven’t seen a huge change, to be honest. I am hopeful that things are changing. I can see that Mr Modi is trying to put in place measures to make things better,” he says.

Edited excerpts

Your focus has been primarily on the western markets, what is your standing in India at present? What new projects are you working on?

I guess what the Dalal acquisition brought was a significant presence in the industry on the manufacturing sector, which we have used not just in India but other markets as well. We have been working in Indonesia, Africa and the Middle-East. Our involvement in India has been centred around that, growing that industrial business, which is fundamental to India’s proposition to the world, particularly with Make-in-India movement. We have also been involved with some critical infrastructure, such as airports, metros, water supply and waste water projects. We have been involved in the critical industry and the other thing we have in our business is Cambridge education, which focuses on skill development and educational reform. You can see those are key enablers of economic growth. Some of the things we are working on are Sustainable Urban Transportation Project which we have been working on for several years now. We are working with UK government on railway station redevelopment, working with ADB on sewage and waste management for NE capital, cities like Shillong.

Mott Macdonald was involved with the Delhi Metro. In fact, you were the first ones to develop the phase. Have you been involved in other metro projects as well.

That was one of our first big venture in infrastructure in the country and very shortly after we made the Dalal acquisition. We were the design engineers for one of the very first packages, we have retained our involvement ever since, much in the engineering and design role. We have also been working with other projects, Bangalore, Chennai, Hyderabad, Kolkata, Jaipur are some of the few. We have got bits and pieces in Mumbai, where we are safety advisors.

A lot of focus of Mott Macdonald has also been on programmes like education and health. You have initiatives in Pakistan and Philippines. Besides, Cambridge are you working on such fields in India as well.

Most of the education that we do is for international financing institutions, and DFID is our biggest client by far. So, we started Cambridge Education in the late 1980s, its been going for some 30 years. It was started partly as a response to the change in emphasis of World Bank or Asian Development Bank, who have been moving away from supporting physical capital creation to supporting human capital creation. So, we have responded to that with CE, principally targetted towards developing the world. DFID is the premier supplier, and we work all over the world. Lately, there is much more emphasis on Africa, but there is some in SE Asia as well. The objective is to improve outcomes for kids all over the world, with teacher training, curriculum development or organisation of skilling. We have a big project in Bangladesh for teaching English called English in Action, which has been using sending out materials via mobile phones. Here in India, we mostly worked on skills development and training. Some of it is vocational. So, we have had this India-EU skills development, which has been looking at various sectors and has been running for several years now. Automotive is one. We are looking at places like Maharashtra, Karnataka and Tamil Nadu. We did do some of the education capacity building with both primary and secondary schools. On the health side, we had a company called Health and Life Science Partnership, DFID is their biggest customer, and they work on maternal health, HIV and nutrition.

Most activities have been with UK or EU government. Is Mott Macdonald involved with the Indian government in some of these CSR activities?

To a limited extent, we have been working on this project for energy conservation, teaching children about energy saving. It is called the Best Energy Saver scheme. That has reached about 200,000 children to date. At the end of the day, we are trying to create some behavioural change.

We had heard that you were part of the Smart City programme, for instance, Faridabad was one such area. Are you still pursuing it and do you have plans to work with more such cities?

Yes, we were. Hopefully, we will. The example we talk about is Jaipur, where we did master planning. In a competition of top-100 cities, Jaipur stood 3rd, we are very pleased with that. The world has generally a misperception of what smart cities mean. It means something different in India, to what it means in the West. In the West, it is all about digital, whereas in India it is also about providing good infrastructure. Basic water, sanitation, decent electricity provision, housing. It is creating a good-city environment supported by digital. With some cities, we have also been working on climate resilience. So, helping places like Bhopal and Jabalpur. Clearly, India has plans to develop these 100 cities. We will be following that and hopefully, participating.

I think a big constraint is money and financing these projects. The government is looking at PPP-type arrangements. We have provided a lot of PPP advice all over the world, so it is a role we could play here given the opportunity.

Green is becoming a buzz word today. Does that pose a challenge for your company, and how are you taking on this new world?

We have been doing green for 30 years. It depends on where you are in the world. What we shifted from is a strong environmental focus to a more sustainability focus. And, sustainability in the form of economic, environmental and social balance. It is very rare you can find projects where you can do everything to perfection. I guess one of the things that is going to drive that going forward—whether for developed or developing countries—are the UN Sustainable Development Goals. We are just trying to wrap our heads around. They apply as much to the western economies, as they do to developing economies. We are going to achieve those, and we are all going to have to act in different ways.

Your revenues, in 2015, were £1.4 billion, and the top line was £64 million, about 14% and 7% growth respectively. How much is that from India and will we see the contribution from emerging markets growing in the coming years.

So, India is about £25 million. Still relatively small, but in terms of staff members its a bit more. So, we have 16,000 staff worldwide and India is probably about a thousand. I think the big thing that we see at the moment is that we are using India more and more as a Global Delivery Centre, supporting projects in other parts of the world. It makes us more competitive and it is good for India, as it counts as exports for India. Exports of skills, with money coming back to India. Our global delivery team started supporting work in the Middle-East, but now we are supporting work all over the world. We are supporting a lot in places like Singapore and UK. Recently, started a few projects in the US.

What do you think about the Indian government’s infra push?

Infrastructure is a key enabler for economic growth. Clearly, there is a huge infrastructure deficit in India, I am told its trillions of dollar. The issue is likely to be financial constraints, so I think it’s all about priority setting whether it is done at the Indian government level or state level.

Are you involved with any state government projects at present?

We tend not to work directly with state government, we find it quite difficult. There is a mix of reasons. It’s very bureaucratic and they are very slow to pay our bills. So, it is not an easy working arrangement for us. We do work with the government when they receive IFI funding, it seems to bring a little bit more discipline to the process. When you have got the World Bank or an ADB sitting on the government’s shoulder, providing a little bit of conscience, you do get more progress with people pushed into decision making in a timely manner. We do get paid on time.

Have things changed in the last three years, in terms of ease of doing business?

I don’t know, I haven’t seen a huge change, to be honest. I am hopeful that things are changing. I can see that Mr Modi is trying to put in place measures to make things better. But have we yet seen the results? Not sure, it varies by state. Some states are easy to do business with than others, but then you are back to politics. So, have we seen a huge difference? No. Can we see things moving? Yes. Let’s see how we progress.

What can the govt do to signal to the foreign cos to come and do business?

I think it is about transparency and decision making. It is about timely decision making, there have been issues within the government about people not willing to take responsibility. So, delay in decision making is a major factor. Making sure people are paid fairly and on time. It is an issue every business, that I am aware of, has faced.
Railways is becoming a big infra contributor, also a lot many airports are coming up given UDAN. Are there plans to get involved in these projects.

We have been working on things like the dedicated freight corridors, on the eastern one in a project management role. One of the constraints with railways is qualified people. We have had challenges finding people with the requisite skills. These skills are in short supply.

Keith Howells
Chairman, Mott MacDonald

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