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March 19, 1999


Requiem: The Andhra Pradesh Value Added Network is dead. Here's a post-mortem report. Shireen in Hyderabad

Andhra Pradesh Chief Minister N Chandrababu Naidu's programme to digitise his state took a severe beating recently, when he has was forced to shelve APVAN, one of his most ambitious projects.

Email this story to a friend. APVAN, or the Andhra Pradesh Value Added Network, was to have interfaced the government's databases with the public through private sector franchisee operators.

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But political pressures, mainly from labour unions of government employees, derailed APVAN. Labour organisations were worried about the redundancies in human resources that the network would have created.

APVAN was to have been built through a joint venture between the Andhra Pradesh government and the Consortium of Singapore Companies.

APVAN's scale of connectivity would have put some substance into the state's attempts at 'electronic governance'.

However, adverse reaction from opposition parties and threat of an agitation by almost a million government employees, made Naidu drop the APVAN project.

A few days ago the state government finally gave a categorical assurance to the Andhra Pradesh High Court about jettisoning APVAN.

State Advocate General V Venkataramanaiah informed a division bench of the high court that the government has dropped the proposal to set up APVAN.

The bench, comprising Justice B Subhashan Reddy and Justice Y V Narayana, was hearing a writ petition challenging the government's decision to take up the APVAN project through CSC.

Retired superintendent of AP Chest Hospital Dr P V R Bhaskara Rao had filed the public interest litigation. He was arguing his case on behalf of a voluntary organisation called People for Economic and Effective Medicare. Rao's petition challenged the Constitutional validity of APVAN.

The bench closed the case after recording the statement of the advocate general.

Under Chandrababu Naidu's stewardship over the last three and a half years, the state government took up a number of policy initiatives in promoting development and use of information technology.

These initiatives include...

  • setting up of a separate department for information technology at the secretariat level;
  • establishment of the Indian Institute of Information Technology with IT schools being set up by IBM, Metamor, Oracle, Microsoft and Satyam Computer Services Limited;
  • construction of the HITEC City by the Larsen & Toubro to provide infrastructure to IT companies under one roof and
  • the decision to develop and implement the AP State Wide Area Network that would connect the secretariat campus network and provide videoconferencing facilities. APSWAN was to connect to the now defunct APVAN.

Naidu has been striving to make Andhra Pradesh a pioneer in electronic governance.

As part of these initiatives, the state had proposed to float a joint venture with the Consortium of Singapore Companies to provide state-of-the-art electronic government services through APVAN.

The government had even decided to enter into an agreement on February 24 with the CSC that comprises the Singapore Network Services, the National Computer Board and National Computer Systems.

The proposed accord had envisaged handing over six key services pertaining to road transport, commercial taxes, utility services, government procurement, land registration and employment exchanges to APVAN for seven years with exclusive rights for the first five years.

APVAN would have monopolised all the transactions pertaining to these six services worth Rs 120 billion a year.

As per the business plan of APVAN, prepared by McKinsey, the project entailed a total capital outlay of $35 million, approximately Rs 1.53 billion to be invested over seven years of operation.

The capital would have had to be sourced from business partners, APVAN's own profits, equity investments by joint venture partners and debt.

The joint venture to implement the APVAN project would have had equal shareholding between the CSC and the government. The AP government would have made a commitment of $4 million, or Rs 190 million, in equity investment.

The project would have also envisaged exclusive service contracts between government departments and APVAN, specifying commercial terms and guaranteed service levels.

APVAN had proposed to roll out pilot projects within four months of signing of the agreement. It was to have reached 80 per cent penetration within the next four years to usher in electronic government services through 450 centres in urban and rural areas of the state.

The draft agreement came up for discussion at the state cabinet meeting on January 14 this year. However, opposition parties woke up to the issue nearly a month later.

It was the Communist Party of India-Marxist that fired the first salvo against APVAN, asking the government to discuss the project in the budget session of the legislative assembly before finalising the agreement.

Opposition parties of Congress, Communist Party of India, Bharatiya Janata Party and NTR-Telugu Desam Party then joined in the chorus of protests.

The Congress demanded that APVAN be dropped because it sought to favour a Singapore consortium with monopoly control over transactions in six major services, amounting to Rs 120 billion a year.

The CPI-M released the copies of the draft agreement and the business plan of APVAN. The party took exception to the project because it believed that farming out of six major services to APVAN would render government staff surplus. It was also argued that because APVAN would be charging service fees, it would make obtaining information more expensive for the common man.

The impact of APVAN's entry into these services would be felt by almost all sections of the public, CPI-M State Council Secretary B V Raghavulu contended.

Other parties claimed that the establishment of 450 offices of APVAN in the urban and rural areas would make the existing network of six services redundant and lead to retrenchment of a substantial number of employees.

Regional Transport Authority offices, commercial tax department circle offices, electricity revenue offices, water supply bill collection centres and employment exchanges would have no work once the APVAN would get operational, it was argued.

The business plan of APVAN even suggested that "The benefit for the government is that it cuts down on the processing and infrastructure required. (For instance) It will no longer need to maintain its 212 computerised registration offices."

It was only in 1998 that the state government took up the computerisation of registration and stamps department at an outlay of Rs 150 million. In November 1998, all the 212 sub-registrar offices were computerised.

The state government employees' associations were also quick to protest against the government's intention to "privatise six important services under the guise of APVAN".

The AP Non-Gazetted Officers Association and the Telangana Non-Gazetted Officers Union were also quite vociferous in their disapproval of APVAN.

The two unions, representing an estimated one million state government employees, even held joint consultations and threatened to launch an agitation programme from March 4 if the government did not give up the "controversial move".

"Entrusting government services to private foreign companies is against the Indian constitution," contended APNGOs Association President K Ananda Rao.

The Association also claimed that the APVAN would render as many as 50,000 government employees jobless and prove detrimental to the interests of the general public as the joint venture would be collecting service charges from them.

Naidu was quick to sense the potential damage the move could cause in an election year. State assembly elections are due by the end of the year.

In a meeting on March 1 with the employees' representatives, Naidu buckled under. He committed the government would drop APVAN.

The employees' associations are ecstatic. "APVAN was on the lines of the East India Company. Employees are extremely happy with the chief minister's assurance that the project has been dropped," Rao remarked.

Naidu, however, made it clear that the government would go ahead with the computerisation of various departments and modernise the services utilising the latest technologies with the sole intention of providing efficient and speedy service to the people.

There would be no compromise on computerisation plans of individual departments, Naidu has warned the labour leaders.

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