'Learn from global experience in privatisation'

By Our Staff Reporter

BANGALORE, JUNE 6. It was time the State Governments began looking at the global experience in private sector participation in areas such as power and telecom if the liberalisation process in India had to move from the transition to the realisation stage, Mr. Sanjay Bhatnagar, CEO, Enron India, said here today.

Addressing delegates on the second and concluding day of the Global Investors' Meet, Mr. Bhatnagar, who is looking at investments in these two sectors in Karnataka, said there were enough success stories round the world for India to look at and learn from. Hinting that there was no need to "re-invent the wheel", he articulated the frustration of prospective investors when they came up against the many blocks that seemed to make the benefits of liberalisation unattainable.

Mr. Bhatnagar is seeking to invest in the optic fibre cable- backboned telecom sector that will increase the carrying capacity in India. "Do you know how difficult it has become in the past six months to make calls to India from anywhere else in the world?" he asked, and wondered how long it would take for the bureaucratic mindset to change with the needs of the times.

Enron, which was engaged in a protracted battle for several years before its power project could become a reality, had been a victim of the lack of transparency in the system, and what he termed the failure to institutionalise the knowledge system. "When a person in Government we've been dealing with has just learnt the ropes and begun to understand the subject, he is moved out, and we've to start all over again," he said.

Mr. Bhatnagar was also not happy with the manner in which private participation in the power sector had been shaping up. There were too many bidders chasing low-capacity projects. When the power sector was opened up in 1992, as many as 192 MoUs were signed up. Now the "gold rush" was happening in other sectors such as telecom. "State Governments should make an honest and realistic estimate of the capacity required by them before inviting bids," he said.

However, Mr. Subhas Chandra, CEO, Zee TV Group, who is making huge investments in education using the flagship company Zee Tele Films for educating rural children through television, said the gold rush was inevitable and the Government need not shy away from creating excess capacity or infrastructure. Critics were already wondering whether Karnataka could accommodate five investors in its optic fibre cable project, for which five MoUs were signed yesterday.

Mr. Chandra said that creation of excess capacities made business sense in the long run. His word of advice for investors at the GIM, both domestic and international was "be sensitive to the needs of the local people".

Zee Group is launching the Basic Education Support Television (BEST) in April 2001, which will cover 10,000 villages in the Hindi belt initially, imparting education to primary school children through television.

Mr. Chandra said this was not to be construed as an attempt at philanthropy, since he was looking for the project to be profitable 10 to 15 years down the line. He was pinning his hopes on the transformation of these rural children into consumers in the long run. The consumer class in India was a mere 40 per cent of the population. "Almost 600 million people in the country are not consumers of any product or service, and we need to improve their quality of life," Mr. Chandra said.

The BEST programme would cost less than Rs. 100 per child per year, which was negligible, Mr. Chandra said. If the power situation in rural India was a cause for concern, Zee would ensure that TV sets supplied to children would also have a battery back-up.

Mr. P.S. Subramanyam, Chairman, Unit Trust of India, observed that India was finally getting comfortable with the idea of leaving the utility sectors to private enterprise, and the Government withdrawing from such operations gradually. This was matched by the growing interest in the private sector in creating and managing infrastructure and other utilities.

UTI could be tapped for support in the services sector, particularly hoteliering and catering. "If Bangalore can welcome KFC and Pizza Hut why can't MTR and Woodlands go global?", he asked.

Investors at the GIM could look at the tourism sector in Karnataka which had seen the tourist inflow touch the two million mark recently. Foreign exchange earnings had quadrupled from Rs. 25 billion to Rs. 117 billion in 1998. Its impressive coastline could be turned into attractive leisure centres with the right kind of investment and infrastructure, Mr. Subramanyam said.

In the technology sector, India could emerge as the "electronic bookkeepers" of the world, and Karnataka could harness areas such as call centres, medical transcription, back office operations, insurance claims processing, legal database maintenance and so on, he said.

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