We are a country of mega projects building at rapid pace. It brings with it a great dream of much more modern future for our country. Yet, there are so many other avenues where we could have spent a fraction of the money with greater benefit and yet we fail to do so. I felt the need to write a take on why we have trouble finding the investment/will power for much smaller projects before we drive our discussions to all out “Socialism” . Before that I would like to clarify that I am neither an apologist for the government nor am I a left leaning congress supporter but as a disclaimer: I will admit that I hate socialism and all the damage it has done in its long history.

Why do governments love megaprojects ?

These are the quick points I could come with:

Loads of publicity : 10 years down the line a poor guy would look at it and claim India is a superpower while he won’t have access to running water

Amazing potential for corruption : Oh Paisa, everyone loves money. So much more money to be made from a 50000 crore project than a 10 crore project.

Fewer middlemen in corruption : It is amazing how much more damage can be a done by 100 officers making 1000 each from a project than 1 person making all the money. The difference it makes to “Speed of execution” can be truly astonishing. Megaprojects are generally huge ground up projects, so the whole system needs to be setup, there are no middlemen you need to pay and you can make more money and still build it (sometimes even on time with quality)

Maybe they really want to do something good for the country and genuinely believe in the project but are naive enough to not do a thorough cost benefit analysis. We totally ignore the fact that many of our bureaucrats and leaders might just be genuinely incompetent :D

To Bullet or not to

Of course I had to start with a take on the bullet train, its trendy and might turn out to be a “white elephant” and its the first thing people mention. But before we go all out creating memes on them, lets compare it to something else with a very similar budget — The Commonwealth games.

Commonwealth games : 11 billion dollars (Source: Wikipidea)

Bullet train : 16 billion dollars (110,000 Crore INR cited in article, converting to USD)

Lets do some pros, cons and caveats of the commonwealth games :

Caveat: Includes a host of infrastructure projects in Delhi including roads, bridges, flyovers, metro extensions and even the airport improvement. I could not actually find enough evidence to link the 11 billion to the 2 billion spent for the airport though and it could have been independent (please help)

Pros: Lots of development for the city and Delhi would probably be much less developed without it and crumbling due to its ageing infra (albeit probably just a little bit worse on the traffic side though)

Cons: Many of the projects don’t have any long term benefits. None of the revamped olympic level stadiums actually make real money. Many of the sports facilities built are badly maintained. A big chunk of the budget was just “corruption” costs of the project. The real money which was beneficial is around 3–4 billion which was spent on metro, airports and roads.

Now the same list for bullet train:

Caveat: 16 billion is just an estimated budget, for all we know it gets built at 5–10x the cost in typical Indian fashion (only exception that I’ve ever seen in my lifetime is the Delhi metro).

Pros: Better connectivity always increases the economy of an area by an order of magnitude and while the area is already well connected, high speed rail opens up the possibility to develop the area in a really big way and destress the horribly congested city that is Mumbai. In hindsight if it can move a good chunk of business away from mumbai than it would be a better investment than spending on transport in mumbai but that is extremely long term and optimistic though. Additionally the setup of manufacturing plants and training would be a huge win for us and enable to setup more of them. Easy finance from Japan is also touted as a huge pro which I’ll give to them but its a much smaller factor since comparison is on cost benefit analysis over lifetime and the low interest ensures that we stick to the already estimated 16 billion.

Cons: Well, Paisa !! No, really. Actually it all depends on execution, if it drags to 3–4x its budget and goes well over time than the planners, modi and everyone else involved should be crucified. Apart from that genuine concern, the other problems constantly mentioned are “how expensive the ticket will be ?”, “will there be enough people ?”, “can it ever make a profit ?”. If we set the really low bar of commonwealth games and if we are optimistic about bullet train execution, than it will be a great investment. But, of course we don’t know that yet. Also something important to consider is the situation where the economic region or India actually hits a slump/slowdown. In such a case, we would be pretty screwed but it seems less likely considering the growth Gujrat and Mumbai have had barring minor hiccups in the past 10–15 years (or even longer for Mumbai)

As cost benefit analysis goes, the pros of accelerating gujrats economy, combined with potentially decongesting mumbai (which like Delhi is pretty much growing without any limit and mostly becoming worse) and tech transfer, it seems like a huge win. While the potentials of the bullet train are enormous, it could easily end up as the next commonwealth games (and the cynic in me says it very well might).

But What about small incremental changes and maintenance ???

While the extremely expensive bullet trains may not really be that bad an idea, there are various projects which can give us 10–15x the benefit in a much shorter span. Let me list out a few I could think of:

New buses for Delhi and a massive increase in fleet size : Estimated cost is 3000 crore INR for a totally new fleet which is roughly less than half a billion USD. This can potentially impact 10+ million people, reduce the traffic in Delhi and in fact potentially remove the need to build flyovers, metros and roads at 3–4x the cost. Note: Numbers from news articles/estimates. Delhi govt. actually just ordered some

Safety revamp of Indian railways : According to article.

According to estimates, the railways need Rs 1.2 lakh crore for overhauling its safety infrastructure that include constructing new rail bridges by demolishing the old ones, besides repair and maintenance of bridges and tracks

Well, this could be a huge win and considering the amount of passengers on Indian railways it seems like an amount which can be effectively recovered over a period of 4–5 years through various means. This amount is the cost of the bullet trains project.

The real problem

While corruption is a huge part of the equation, there are other major issues to be blamed as well.

Socialism is still entrenched in our politics. For 40+ years, we have experimented with socialism and ensured that we all remain “equally” poor. Despite the impact (and probably some harms) of capitalism, politics still echoes the easy to explain theory of socialism. Examples

The examples are countless and they keep repeating daily. The slightest mention of a price hike is protested and the middle class enter the classical chicken and egg argument “Improve stuff and we’ll pay”. No one has been able to decipher the x% of improvement required for someone to pay +y more money happily though. Ok, too harsh, while we are right to demand better facilities before prices are increased, it’d be better if we could be more patient and even better if we had all our elections at once every 5 years so that parties are not fighting elections somewhere every few months.

A Leaky system. Babudoms great home is India. While corruption is portrayed as the all encompassing evil, we have to take a few things into consideration.

Low salaries : Thanks to our entrenched socialism, we make a big deal of MPs earning 1–2 lakh a month- A big chunk of the engineers and corporates sitting in Gurgaon earn 3–4x that. Now imagine the salary of a constable or a sweeper. Yet, we make a mountain of the “bribe culture”. Add in job stability — a typical socialist model and we have the perfect storm. We neither demand high standards of performance nor are we ready to pay for it, hence we get what we paid for.

Inefficient corruption : Honest confession, I love the chinese model and no I am not talking about their governance but about their corruption. It is nicely streamlined, people at the top take the money distribute it down and they still maintain their socialist facade. The thing is, job gets done and done well even though the cost might be 1.5x of what you initially planned. The problem is not that there is bribery, but the fact that you need to bribe 50 people to get things done. At the end of the day, your job still does not get done, while in the other case bribes are just additional cost of project like taxes.

The combination of these factors ensure that we can’t do something simple like increase fares and drive massive investments into existing infra. The chain of people involved is too big and the estimate is off by atleast an order of magnitude. Of course, we’d vote the political party out which does any major price change.

Meanwhile mega projects give huge publicity, are easier to create a completely new chain of command and have much greater potential of paisa. They can also do the shadiest ways of finance, it could well be completely tax funded and no one gives a sh*t, its not like thats our money until the opposition realizes that it would be a good way to win an election.

Gist

After going off track and on track, let me summarize.

Only thing that matters now is the efficiency of the system/execution of projects. We are at a stage where the biggest risk of a project is not bad planning or foresight but extremely shady execution. So the only thing that matters is “how”, “when” and “if”, and not “why” we need the project. This applies to the bullet train as well. When we reach a stage where the system is efficient but makes tactical mistakes, then we can debate them.

Someone needs to bring a stop to the whole election every few months phenomenon. Do it everywhere once every 5 years so our leaders can escape the price hike dramas (or dharnas if it is Delhi :D)

We need massive increases in salary of government officials and complete removal of job security. This is not some Marxist era job, just f**k off to the pvt. sector if you can’t do your job well enough, a nation is dependent on you.

Smaller projects can’t get funded till they stop leaking money, no japanese investor or world bank will throw 10–15 billion into a railways maintenance project which may not even be able to hike prices and might have massive corruption issues.

Final Caveat (i promise): Capitalism is not necessarily great but history has proven that socialism is definitely pure evil. Socialists have killed a lot more people than the Nazis, world wars or jehadis directly or indirectly (just lookup all the badly handled drought death numbers as a start). Lets f*ing resist the urge to ask “why” and ask if it is feasible and if the system is in place to do that.

More specifically,

When dealing with Train crashes you don’t need to ask why we are spending money on 5–6 other projects, we can easily do both and more if we could just setup a less leaky and more efficient system. We need to ask the right questions like, what the f**k is govt doing on safety systems ? why are there so many accidents due to negligence (thats not infra related) ? Why is it so hard to get investment ? Where is the paisa going ?

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