Pictures of the Future    Fall 2006

Toward A Turning Point

The numbers are alarming. Ten million of Mumbai’s approximately 18 million inhabitants live in slums, and for every kilometer of the city’s 2,000 km of streets—only 350 km of which are paved—there are 600 honking vehicles. The city’s three suburban rail lines transport 6.5 million people a day, with up to 15 people sometimes jostling for one square meter of train space. In a 2006 quality-of-life study released by consulting firm Mercer, Mumbai was ranked 150th of 218 cities, followed closely by other big cities like New Delhi and Chennai ( Facts and Forecasts).

"Mumbai’s infrastructure is crumbling," writes India’s Economic Times, even calling this an understatement. A McKinsey study published three years ago came to the same conclusion, pointing out that Mumbai was falling behind not only in terms of quality of life, but also in economic performance. The city’s economy grew only 2.4 % per year between 1998 and 2002, lagging far behind the national economy’s healthy 5.6 % growth rate. "We described the situation as it is and explained what’s been going wrong," says Dr. Shirish Sankhe, a partner at McKinsey in Mumbai, whose offices in the Nariman Point financial center overlook the city. "We also formulated a vision that could transform Mumbai into a world-class city in 15 to 20 years." Narinder Nayar, chairman of Bombay First, an entrepreneurial lobbying organization, is enthusiastic about this vision, which he wants "to become reality."

Billions for Infrastructure. Mumbai has plenty of company. New Delhi, Calcutta and Bangalore face similar challenges. That’s why the Indian government plans to spend between $150 and $200 billion over the next five to seven years on infrastructure projects for water supply, transportation, energy and building construction. The lion’s share of the investment will go to the cities. "This will present us with some great opportunities," says Jürgen Schubert, Managing Director of Siemens Ltd., India. Siemens has been manufacturing products in India for 50 years and now employs over 14,500 people there. Its first project—laying a telegraph line from London to Calcutta—was carried out in 1867. "People here see us as an Indian company with German roots," says Schubert. "We’re well-networked and familiar with all aspects of India’s society and culture."

One of the country’s most prominent cultural factors is its bureaucracy. Obtaining construction approval in Mumbai can take three to six months, for example. "But typically the approval process should not take more than 45 days," says Sankhe. McKinsey says Mumbai’s biggest problem is a lack of governance. "At the beginning of 2006, they at least set up an agency that coordinates decisions made by city officials," Sankhe says.

Coordination is needed because the mayor of Mumbai has no executive powers. The post is largely ceremonial. Furthermore, over 15 government agencies in the state of Maharashtra, share responsibility for the city’s administration. The complex processes for coordinating the activities of agencies and ministries for road construction, housing, transport, trade, aviation, ports, railways and police makes it very difficult to conduct urban development and infrastructure projects.

Without clear political responsibility, there is little incentive for investment. "We need a mayor with real power," says Nayar. A mayor with clout could also improve Mumbai’s financial situation. Residents currently pay some $10 billion in taxes each year to Maharashtra, but only $250 million is channeled back into the city. "We actually need ten times that much," says Sankhe. "The government has realized that it must act and has started to move ahead with several projects."

Rails and Roads. One of these involves substantially increasing the capacity of the local rail transport network, and Siemens is helping by delivering around 400 three-segment trains, complete with drive systems, electrical equipment, and control and passenger information systems. The contract volume is 280 mill. €, and some parts of the energy-efficient drive systems are being built in India. The systems work in conjunction with state-of-the-art inverters adapted to extreme conditions. There are also plans to equip maintenance workers with voice-operated handheld computers in order to optimize maintenance activities. In addition, Mumbai will get its first metro in 2008—a 15-km line that will be followed by two others with a length of almost 50 km, to be completed by 2011. Total investment for all three lines will amount to approximately 2.3 bill. €.

What’s more, an elevated highway is now being built along the coast between the northern Mumbai district of Bandra and Nariman Point in the south. Construction will also soon begin on a 25-km bridge that will connect the city center with towns on the other side of the Bay of Mumbai, where plans call for housing to be built for four million people. In addition, Mumbai’s old port, which is no longer in operation, offers an opportunity to establish a completely new district near the city center. Sufficient affordable housing will be required to achieve the city’s stated goal of eliminating all slums by 2025. The problem here is that it’s not just poverty that forces millions of people to live under plastic tarpaulins and tin roofs; it’s the high rents, which have already reached levels on a par with New York and Tokyo.

The government is counting on private investors to finance some of the projects—something that was impossible up until a few years ago due to legal restrictions. Such investment will transform Mumbai’s international airport. Bangalore provides a model. Its new airport—India’s first privately financed one, about 25 km from the city center—is scheduled to start operation in April 2008. Siemens is providing all the technical equipment for the airport, which will serve 6.7 million passengers a year. Within a few years, that figure could rise to 11 million ( Airports). "The old airport is coming apart at the seams," says Ravi Shankar, the Siemens manager responsible for airport systems in India.

India’s New Maps. Greater Bangalore, known as India’s Silicon Valley, is home to nearly ten million people. Like many other global companies, Siemens employs thousands of development engineers here—professionals who develop, among other things, software for communications, medical equipment and automotive electronic systems. SISL (Siemens Information Systems Ltd.) in Bangalore has developed a geo-information system that serves as an important planning tool for infrastructure projects. The system, which was designed by V. Venkata Ramana, reconciles for the first time satellite images with geographical maps of India. "Most of the maps are very old," says Ramana. He therefore used high-resolution satellite photos to digitize the maps of the area around Chennai—formerly known as Madras—which he then compared with government records. "We found many inconsistencies," says Ramana. This is important for property taxes, as the information used to calculate them must be precise. He also discovered that a river bed had changed its course since the map had been recorded. "That’s key information for road and rail planners," he says. Some cities, including Bangalore, are already using the system.

These digital maps can also be combined with socio-demographic data—such as population density, age and income information—to help plan new districts in urban areas. "We can also follow what happens to rainwater—most of which seeps into the ground," Ramana explains. He has already accomplished this by combining satellite data with 3D images of the area. "We used this technique to identify more than 50 potential locations for catchment basins in the state of Chhattisgarh, which has water supply problems." Building dams in parched areas would make it possible to use more rainwater for irrigation, which would in turn raise what are now dangerously low groundwater levels. Such a water management system, which takes terrain structure into account, could also help the Indian capital, New Delhi, cope with massive monsoon rains. In July 2006, for example, three hours of heavy rain transformed several of the city’s streets into rivers. The irony is that a few months earlier, the city, which has 17 million residents but collects only two percent of its rain water, was suffering from a drought and temperatures of 45 °C. "Our system can identify the places where rain water canals and catchment tanks and basins should be built," says Ramana.

Expanding the Power Network. Water isn’t the only thing that’s in short supply. New Delhi residents are regularly subjected to power outages that black out entire districts. "In Delhi and many other cities, installed power output is not sufficient to ensure uninterrupted supply," says Harminder Singh, head of Siemens Power Generation (PG) in India. The government has ambitious plans to provide enough electricity for the entire country by 2012. This will involve generating 100,000 MW of additional power, 15,000 of which will come from private companies. Plans also call for an additional 135,000 MW to be added to the grid by 2020. More than one third of the total power output in India is generated using Siemens technology. PG recently received an order for a 1,100 MW combined cycle power plant in the state of Gujarat, and Siemens equipped the Dadri combined cycle plant near New Delhi. Most of Mumbai’s electricity is generated with the help of Siemens technology as well. The Trombay plant operated by Tata Power is equipped with a 500 MW steam turbine and a 200 MW combined cycle turbine system from Siemens. "To reduce environmental pollution caused by burning coal, we use only low-sulfur coal imported from Indonesia," says plant manager S.D. Deshpande. "We also have the only flue-gas desulfurization facility in India."

When the New Delhi electricity market was privatized four years ago, transmission losses for Tata were 54 %. "We’ve since reduced them to 25 %," Deshpande reports. "We installed new digital meters and explained to people that electricity has to be paid for. We also told them how to make payments, for example via the Internet." This was necessary because most of the losses occurred either through people illegally drawing off electricity or not having any way to pay their bills. Plans call for transmission losses to be cut to ten to 15 % over the next three years through investment in the power grid.

While New Delhi still faces some major obstacles in terms of energy and water supply, much has been accomplished in the area of transportation. New overpasses have reduced traffic congestion, and major beltways have been expanded. What’s more, all buses and the typical three-wheeled Indian taxis run on liquid natural gas. Three rapid transit lines allow travelers to get through the city quickly, with parts of the routes either underground or elevated on concrete pillars. Siemens has equipped the longest line with a rail control system and signaling technology. The rapid transit network will be extended to nearly 250 km by 2021. Although the original schedule called for the first 62 km to be built over ten years, work was completed in just seven. This impressive speed should largely be credited to Dr. E. Sreedharan, the 73-year-old Managing Director of the New Delhi Metro, who created a lean administration, involved employees in the project, and ensured that deadlines were met.

The government of New Delhi can’t afford to do without people like Sreedharan if it hopes to get the city ready for the 2010 Commonwealth Games, which will bring 7,500 athletes and officials from more than 50 countries to the city. "It’s a perfect opportunity to expand our infrastructure," says New Delhi’s Chief Minister, Sheila Dikshit. Staging the games will require an investment of around 1.3 bill. € for road construction, power plants and water supply—not to mention hotel rooms. New Delhi currently has 9,000 one-star rooms; it needs 30,000.

Health Tourism. Visitors may also be coming to Delhi in the future to stay in hospitals outfitted with high-tech equipment. The Max Super Speciality Hospital is one of many examples of India’s excellent healthcare facilities. The new hospital has invested nearly 120 mill. € and is targeting its services and state-of-the-art equipment at wealthy patients from both India and abroad. "We receive inquires from the West practically every day," says neurosurgeon Dr. Ajaya Nand Jha. "That’s because we offer top-quality healthcare at low cost." Jha’s operating room is equipped with Asia’s first "Brain Suite System," whose Siemens magnetic resonance tomograph (MR) delivers real-time images of a patient’s brain during surgery, enabling doctors to follow the progress of procedures. "The system allows me to see if any part of a tumor has been missed," explains Jha.

The hospital also has a 3D angiography system equipped with a flatbed X-ray detector from Siemens that enables doctors to conduct minimally invasive procedures, such as widening blood vessels or treating minor aneurysms in the brain. The 450-bed Max Super Speciality Hospital has departments for orthopedic medicine, pediatric medicine, gynecology and nuclear medicine.

"The private sector is investing heavily in state-of-the-art medical technology," says D. Ragavan, head of Siemens Medical Solutions in India. One such investment is a 3-Tesla MR scanner with very high resolution that will soon be coming to New Delhi. Another is the first order by an Indian customer for a Somatom Definition unit, the world’s fastest computer tomograph. It generates images of the tiniest blood vessels at speed, allowing sharp images of even irregularly beating hearts to be created in fractions of a second. In addition, four Siemens PET-CT combination scanners have been installed in India, and two others will follow shortly. The new devices often end up in new hospitals, which are springing up around the country. In Gurgaon, an up-and-coming satellite metropolis near Delhi, 18 new hospitals are to be built over the next five to ten years. Mumbai also has a new private health center—the 376-bed Jaslok Hospital, which has been outfitted with a range of medical imaging equipment from Siemens, including magnetic resonance tomographs, ultrasound devices and complete X-ray systems.

Healthcare is currently the only sector where Mumbai can keep up with the best cities in the world, according to the McKinsey study. And medical technology also clearly illustrates what the private sector can accomplish if the requisite legal framework is in place. "With a targeted planning system and the right kind of investment, Mumbai will be able to offer a good quality of life in 15 years," says Bombay First chairman Narinder Nayar. Jürgen Schubert of Siemens is also optimistic. "India is on the verge of a major transformation that will be more rapid in cities than in the countryside. The country is now ready for takeoff," he says.
                                                                                                Norbert Aschenbrenner