Friday, August 18, 2006

Return on infrastructure

Niranjan Rajadhyaksha in Businessworld (registratoin required), issue dated 7th Aug, makes a simple point that the next surge in corporate productivity could be driven by better roads and ports. Simple point, well understood, but one of his examples drives home the point.

The Bombay Pune nightmare is known to everybody. Prior to 2000, the journey could take anywhere from to 4 to 12 prior to the expressway. Today, the journey can be done in a little over 2 hours. That is an obvious benefit. But he notes, the fares for an airconditioned bus has gone up from INR 100 to 150. This, despite the fact that the road is tolled, value of money has reduced, fuel prices have gone up considerably, the buses are spanking new Volvos that cost INR 50 lakh each - plus no overloading, no fleecing etc.

The point that he makes is that the expressway lets the bus owners turn around their fleet faster, thanks to the lesser drive time. So, if earlier the bus owner turned his bus around for a probabilistic 4 trips a day, now its an almost certain 8 trips a day. More efficient use of capital and the benefit gets passed onto the customer.

Add up the fuel saved by not having to drive in first gear and it is a lot. Better roads, lesser signals means lesser time to commute - which results in, better productivity at work, better time spent at home and a better quality of life. For all of us who spend time in traffic jams whether in public or private transport, it is evident, but for politicians who never endure traffic jams, it is not or is apparently not.

1 comment:

Karthik R said...

very true. I was on the Trichy - Chennai NH a couple of months back. The traffic was crawling up to Tindivanam. But once we crossed Tindivanam the difference was obvious. Four lane tollways, really good roads and the driver was doing 120kmph. Work on extending this all the way to Madurai has begun. I'm sure truckers, businesses can't wait for it to be complete.