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February 26, 1999


While hyperlinking Andhra Pradesh... Rentala Chandrashekhar, the state's wireman, shows how government can make people click. Rentala Chandrashekhar is the secretary to the government of Andhra Pradesh and the hands-on man behind the great effort that the state is making to digitise itself.

Email this story to a friend. The 45-year-old Chandrashekhar also heads the Andhra Pradesh Industrial Infrastructure Corporation and has significantly helped Chief Minister N Chandrababu Naidu convert his laptop presentations to concrete and steel... and hundreds of kilometres of the twisted-pair.

In an interview with Patralekha Chatterjee, he is ready with answers that are convincing but not glib.

His zeal for putting IT within government and between the government and the people is the romance of a believer.

Yet his reasons for his madness are more than mere belief. They stand clinical scrutiny.


How many companies have booked space in HITEC City?

About a dozen. Companies like Microsoft, Oracle, Toshiba and VSNL to name a few. About 71 per cent of the space has been booked up till now.

That includes a floor, which has been kept for service organisations like banks and travel agencies.

Now we have started the second phase. The prime minister laid the foundation stone for it during the inauguration of the first phase.

The second phase will take about 18 months. We have planned it in such a way that each phase will provide enough space until the completion of the next phase.

How is the economics of the project going to work?

The outlay for the first phase is approximately 120 crore rupees (Rs 1.2 billion). The company itself has an equity of about 20 crore rupees (Rs 200 million). L&T Infocity, the company that is doing the project is a joint venture between L&T and APIIC (Andhra Pradesh Industrial Infrastructure Corporation).

In this joint venture L&T holds 89 per cent equity and APIIC holds 11 per cent. The rest of the money comes from loans and advances paid by people who are buying space.

What is the first phase? What is the second phase? Could you elaborate?

All in all, the project covers about 160 acres. In the first phase the building that was inaugurated by the prime minister took up about 6 acres.

In the second phase an area of 7 acres is being taken up to build similar facilities.

In the third and fourth phases, other facilities will get built, including some common facilities like an auditorium and clubhouse.

There are two kinds of spaces here. In the first phase, a number of companies move in... Half the area is for individual companies to develop their independent facilities. Microsoft and Oracle have done this. They will be building a larger facility.

The project envisages rollout in phases. In all, about six phases. And the period could be anything up to 10 years. But it could be as early as 5 years as well. Market conditions and the industry's growth rate will determine the speed at which the different phases go through.

But the basic principle here is that the infrastructure keeps growing at a rate at which IT industry requires it.

Today the IT industry in Hyderabad is growing at the rate of 100 per cent a year. This means that requirement of space, manpower and other critical infrastructure is also growing. This has been the trend for five years.

What is the catalyst for this growth?

Well, the basic thing is that from the beginning Hyderabad has been a good location for information technology.

Because the fundamentals, that is the human resources, are here. Andhra Pradesh contributes more than any other state in India to the Indian IT manpower globally.

On the way to HITEC City
On the way to HITEC City: Even residential townships can't escape the s-word!
A lot of 'info cities' are coming up in India. Three are in South India itself. Could we be heading towards an overcapacity?

That question can be answered at two levels.

Firstly, I do not believe that we will face the problem of overcapacity.

If you look at Indian software exports and its rate of growth... India has been consistently having an over 50 per cent CAGR (cumulative aggregated growth rate) for a number of years now.

All the predictions that this will continue for only one more year because the base is very small have been proved wrong for so many years now. So also is the case with Hyderabad.

Everyone said it couldn't grow at 100 per cent anymore because the base is very small. We have heard this story now for five years.

So, if you look at the current size of the IT industry, it is almost 2 billion US dollars. It is growing at 50 per cent, which means we are adding 1 billion dollars.

In the software industry, there is a ready correlation between the increase in turnover and the requirement of infrastructure.

For every person, there is an average productivity. Then you can work backwards to see how many persons that means. For each person, there is again a norm of 100 square feet. So, there will certainly be no overcapacity.

But that is not the complete answer.

The other level at which you have to look at this is whether you offer the right cost-quality combination that the industry is looking for.

Because if all the growth takes place in these islands, then all this capacity that has been created, even cumulatively, is not enough.

But the fact is that all of it does not come into this. People look for better options. Typically, these could be cheaper spaces.

In Hyderabad you can get space cheaper elsewhere. Of course, it is a different package altogether. The cost and the facilities are different. I think each industry will make a cost-quality combination that is appropriate for itself.

Some of them will gravitate toward HITEC City. Some of them will gravitate outside it. So, the key question is whether all these habitats that are being built are able to offer an attractive cost-quality combination? That is going to be the key to how much they are going to be used.

These are questions we had gone into at the inception of the project and we believe that we have struck an appropriate level of quality, keeping in mind what the industry needs.

How do you guarantee continuous supply (of resources like electricity and connectivity)? Who is going to guarantee that and what is going to be the mechanism for it?

These arrangements have been worked out with individual departments by building in redundancies.

For instance, if you take telecommunications, the Software Technology Park has two parallel routes. It has two independent satellite links in addition to the VSNL's satellite link.

There is always a possibility of all the three links going down but it is so remote a contingency as to be not mathematically significant.

As far as power is concerned, it is provided through redundant feeders. That is the feeders are provided from three different sources, and again, theoretically, this power can be disrupted only if there is a collapse of the whole grid. And that can happen only in a very remote kind of contingency.

In the HITEC City there is also captive generation. It takes care of about 40 per cent of the load. That is, in addition to the redundant feeders. So you see, there are a lot of levels of support.

Who is going to pay for these?

Supplies have been priced at rates commensurate with the investments made.

But generally, we don't pay the market rate for these sorts of services. Will the market mechanism be in operation here?


What is the fallout of a project such as the HITEC City on the rest of Hyderabad?

There are two ways of looking at this.

One is that as far as the HITEC City is concerned, it is one of the most important engines of economic growth.

The amount of economic activity that it generates will undoubtedly affect the rest of the economy of the city and the region.

Internet gateway
Internet gateway: Old Hyderabad has its young Turks too.
If you have, let us say, 300 crore rupees (Rs 3 billion) or 500 crore rupees (Rs 5 billion) of investment taking place within this area then, naturally there will be a whole lot of economic activity taking place.

For every one employed person, five get indirect employment. We are witnessing an all-round economic prosperity.

Of course, the state government has also done a lot of all-round developmental work.

When you see the mushroom growth of shopping centres or entertainment or leisure... There has been a tremendous growth in the services sector.

That is part of the one is to five employment generation that I have been talking about.

This is a typical situation. And we are definitely seeing the full impact of that happening in Hyderabad today.

The other aspect is that the state has also placed a lot of importance in the use of information technology within the government to deliver services more efficiently.

There again, the use of information technology, the presence of all these companies, will actually accelerate the process.

For instance, we are now working on setting up a 'wide area network' and a 'value added network' that will enable various government services to be offered through service centres located all over the city and all over the state over some time.

That means that today various services, whether it is issue of licenses or issue of various certificates or bills or filing of complaints... for all these services you won't have to go to any one specific place.

There will be (IT) centres all over, so that access to government becomes easier. For this we are planning to tie up with Singapore Net which has set up such a service for Singapore.

More service centres means more government or less government?

One of the essential features is that none of this will be part of the government apparatus though it actually allows access to government services.

The people in the service centres, for instance, will not be government employees. We will have a service contract with a private agency so the interface with the public will be part of that.

Say I want to file my property tax. What would I do now and what would I do when the new system comes on stream?

What you would do now is go to a municipal office and find out what the assessment on your property is and how much is due.

Then you would go to a bank and make the payment of a certain amount and then come back with the receipt and file that along with the returns in that office.

Then you would have to wait for them to accept it or indicate that you have some surplus or deficit or that your account has just been cleared.

This would happen from time to time. There are attendant uncertainties with this kind of a system that exists today.

You may go somewhere and find that the information you want is not available or the person concerned is not available. A number of things can happen which are quite commonplace in such a context.

But through a service centre a person could not only find out the information at any time but also, for instance, file returns or pay whatever the dues are and do that at any convenient location at any time.

On the way to HITEC City
Soft-sell: Can you code? If not, you are not looking.
What is the net benefit to the government?

The primary focus of this effort is to make it more convenient for the end-user and then we work backwards from that point.

We are not looking at this as either downsizing or increasing the workforce. Over a period, this would result in saving government money because we have more people, their interactions with government will increase and this would mean we would have to hire more people or the quality of services will decline.

Here, we will pay a transaction fee to a private agency that will do the job. Then that transaction fee is also aggregated because the service centres are not specific. It is not as if each department will have its service centre.

As the numbers increase, there is a limit to which a manual system can be effective. We are talking of a quantum difference. It is very difficult to provide high quality services, effectively and reliably over a period even if you are prepared to keep as many people as you need.

We would not need to add to manpower because the delivery and the front end is taken care of through a system which is linked to a revenue stream that is linked to a transaction.

This will be a joint venture that we are setting up. The analogy of this is the STD booth. A private party runs each one but the government provides the core services.

What is the telephone penetration in Hyderabad city?

Telephone penetration has to be measured not in terms of individual telephones but telephone reach. That means STD and phone booths that have reached every nook and cranny have to be counted.

I think the analogy you should be looking for here is like the penetration of the cable TV. Something which was not known 10 years ago and today is in all villages.

So, I think, the question is not about technology orientation, or cutting off people because the technology is difficult to use and or about the service being irrelevant to people that are not literate or rich.

The case is whether it is delivering any value. We are not talking about everyone using computers or everyone using the Internet.

Because using computer or Internet demands literacy and typically a certain level of economic development.

What we are talking about here is that in a given situation how we could have a more efficient delivery mechanism for governmental services.

Take the simple things. Every year there are tens of thousands of students that need caste certificates for school and college admissions.

One of the proposals is that since these are available from existing databases that have been created, they can be available from across the counter.

Cutting the flab is politically tough. How do you propose to deal with that?

There will always be resistance to new modes of doing things, to change. The point really here is that if you can create a constituency, a constituency of people who are really benefiting from the new system and you have a lot of support for it, then people who are deriving the benefits will not allow the process to be rolled back.

Today people who do airline bookings have got used to a certain quality of service. Not all the objections of airline staff that computerisation is going to affect their employment prospects succeeded in holding it back.

So, why should not a rural person also have the same quality of service? It is primarily aimed at the urban and rural poor. Whether it is old age pension or a ration card or caste certificates or land holding documents.

There is no intention of retrenching people or sending people home. But there is a very clear, explicit and stated position of the government that it is not going to add any more people. That it cannot afford to keep growing.

So the question is how do you significantly improve the quality of governmental services in a situation where the number of people wanting such services increases as literacy grows, as awareness grows and as programmes grow.

There is a higher level of consumer awareness; there is a higher awareness in the media. All this places added pressures on the government machinery to deliver quality services.

How can you do that except through the use of information technology. There is no other way. Alternatively, you don't use information technology, you don't increase the number and the quality of services will decline.

What are some of the visible successes that will help build the constituency you are talking about?

For instance, all registrations in the state today are done through a computerised system. People now can get their registration done in minutes. This would have taken days or weeks earlier. Nobody can afford to openly oppose something that is benefiting people.

People can't openly say that we are going to oppose something that is convenient to them because our livelihoods are at stake. Therefore there are limitations in how far they can go in opposing IT. That is what you have to use. Make sure that some value has been created and some benefit has been conferred.

If there are many more people who are being benefited than the earlier vested interests that are being displaced, then you are on the right track.

Registration has been done through the length and breadth of the state, not only Hyderabad. The registration department was already on stream in November. The database related services for individual citizens also are in operation in 70 mandal offices throughout the state.

So, in phases, it is being done. What we are adding through the value added network is the anytime, anywhere layer on top of the computerised services.

The anytime, anywhere plan we have will take nine months, you will see a lot of action over the next one year.

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