Making MIHAN a success story for Vidarbha

This White Paper on MIHAN project was published in the International Journal of Management, IT & Engineering, Vol. 9 Issue 6(2), June 2019

At an exposition in Mumbai last week, while exchanging business cards, the old card was given to a delegate by mistake. The person enthusiastically enquired, if I was associated with MIHAN? I apologized him for the old business card and informed that I used to work as the Marketing Manager for MIHAN project previously. The person was a native of Vidarbha region, so he immediately asked about MIHAN’s progress and my experience at MADC, the company that executes the MIHAN project. As an answer to his question, I could only say, 'MIHAN is still taking off because of the various business management challenges’. And rightly so, MIHAN is a classic case study of how ambitious government projects should not be managed.

MIHAN is the project being executed by a special purpose vehicle (SPV-Company) named MADC (Maharashtra Airport Development Company) whose name is always confused as MIDC, the industrial development corporation for Maharashtra state. Barring few people nobody recognizes MADC, as no major airport is developed by the company except Shirdi. However, MIHAN is a well-known phenomenon for the people resided in Nagpur, as it is synonymous with the development of Nagpur in terms of employment and opportunities for business.

History:

MIHAN project’s genesis goes back to the pre-independence era, during 1936, when the British rulers wanted to have a cargo hub for India at Nagpur since Nagpur lies in the geometric centre of the country. The cargo hub would be able to cater both the defence as well as civilian aircraft. However, before the plan could be executed World War II started in 1939 and by the time the war ended, India got independence from the British rule. But Nagpur remained the epicentre of India’s Airmail and cargo systems for a long time. In mid-nineties, the project saw its re-birth due to the initiative of few ambitious Nagpurians. MIHAN started with great fanfare in early 2000 era and was touted to be the game-changer for Nagpur. It was the first Special Economic Zone (SEZ) with an Airport next to it. (Now a couple of other SEZs also have airport attached). However, MIHAN was one of the first smart city projects to uplift the face of Nagpur and could match the development in other cities like Pune or Navi Mumbai.

But an ambitious project like MIHAN with huge expectations and great potential could not take up as expected apparently due to administrative inability. Very few officers who have been at the helm of it are actually aware of how to get the business. The first Managing Director was a visionary and had all the authority to drive this project. He had a good association with everyone in the government (across political parties), so he could get the funds for building infrastructure. However, the team under him was lacking authority and ownership. Most of the officers working at MADC were recruited as consultants from Public Works Department (PWD) after retirement. They lacked motivation and accountability and were never given the power of decision making. But as they say, power corrupts and absolute power corrupts absolutely, the VCMD was unceremoniously removed from the position after some irregularities came to light in the ambitious housing complex and the power project in MIHAN. After the ouster of the first MD, the team could not provide proper inputs to the new bosses, instead, every officer thought that he is the boss. This has reduced the project to a white elephant, on paper.

Scope of the Project:

MIHAN is supposed to be one of the largest economic development projects underway in India. A consortium led by L and T Ramboll Consulting Engineers was asked to undertake a techno-economic-feasibility study for the project in 2004-05 (the study supported the project). The project was designed to make the most of the central location of Nagpur and to convert the airport into a major cargo hub with multimodal integrated road and rail systems. The project consists of two parts: the international airport acting as a new cargo hub; and a special economic zone of 2,086ha with an accompanying residential and commercial zone covering a total area of 40.25 square kilometres on the southern end of the city of Nagpur, adjacent to the airport.

The Government of Maharashtra formed a special purpose entity called the Maharashtra Airport Development Company (MADC)to mediate in the development of the MIHAN project. The project was financed by Indian banks with a total loan amount of Rs7 billion, and an investment from the state government and the Airports Authority of India. The projected target for the airport was to serve 14 million passengers (later reduced to 7 million passengers per annum) and handle 0.87 million tonnes of cargo by 2025 (handling 50 aircraft a day).

The water supply and sewage system for the airport was constructed by Kirloskar Consultants and Nagarjuna Construction, and completed in August 2010 at a cost of Rs2.41 billion. The Rs1.90 billion road network was built by SPAN Consultants and the PBA Sadbhav joint venture and was finished in 2010. The Rs750m rail bridge and interchange was completed in 2010 by Consulting Engineering Services India and AFCONS Infrastructure. The stormwater system was completed by SPAN Consultants and PBA Infrastructure in 2010 and the power infrastructure was installed by Mott MacDonald and Jyoti Structures. The project central facility building was built by Larsen & Toubro (ECC Division) and Shapoorji Palloonji. The fire station was carried out by Prasad & Associates and Yeses Infrastructure.

Till date, MADC has already spent more than Rs 1000 crore in developing basic infrastructure like roads, street lighting, water, a captive power plant and so on.

Airport Infrastructure:

One of the major aspects of MIHAN is the expansion of the existing 10,000 sq. meter terminal building of Nagpur Airport with two parallel runways. The project will cost Rs790 million and will cover the addition of a new terminal building catering the needs of 6.9 million domestic and international passengers annually. The present terminal section is a steel and glass structure opened in April 2008. Its facilities include central air-conditioning, passenger boarding bridges with a visual docking guidance system, escalators, lifts, a baggage conveyor system in arrivals and departure hall, CCTV and FIDS. The two new aerobridges became operational in 2011.

Human Resources:

The officers or staff working in the different departments of MADC, particularly with MIHAN project sadly works in different directions:

Land section: It is only concerned about the land acquired for the project, irrespective of whether it is needed and for what purpose. The major task is to address the issues of the project affected persons(PAP).

Engineering Section: It is solely focused on the maintenance of infrastructure works as the most important aspect of the project, because the whole MIHAN project itself is being treated as infra project. It is noteworthy to mention that all the infrastructure projects are executed through various agencies and the officers and staff from this section are there to co-ordinate with the consultants and agencies.

Town Planning Section: Fully focused on the plan sanctioning aspect irrespective of the market dynamics.

Marketing Section: The name of this department is confusing, as there is no focused marketing except maintaining investors and public relations. Facilitating Allotment of land is the key aspect of the section, irrespective of the market behaviour.

Electricity and Water: These departments are busy in keeping the companies in MIHAN on their toes due to the dynamic pricing of water and electricity. Since MIHAN is like a smart city project, electricity and water supply are the basic infrastructure, however at MIHAN the Power plant is completed but is unable to provide electricity due to the threshold and similar issues are with the Sewage Treatment Plant and Tertiary treatment plant.

Current Status:

MIHAN project is definitely big and ambitious in terms of infrastructure and logistics; as the total area, it occupies in more than 4000 Hectares. But it is a market-driven business project which unfortunately the bureaucracy has always ignored. Or if they have acknowledged, not tried to implement it in that manner. I had got an opportunity to work with MADC a little over 5 years and was very fortunate to get associated with the project during the time when the Managing Director of the company was of the rank of Former Chief Secretary. I consider it as my privilege to be a part of this project and contribute in the development of Nagpur.  Being a Nagpurian, it was easy for me to connect with the local public, government officials and local industry. However, the land prices in the SEZ, as well as the industrial area outsize SEZ, are slightly on the higher side, when compared with the developing regions like Telangana, Chattisgarh or Madhya Pradesh. The gamble played by the state government by increasing the land rates to mitigate the loss of revenue due to offering cheap land to Patanjali has not reaped any benefit so far. Rather the Public Interest Litigation on favouring Ramdeobaba and the transfer of RTI officers gave negative publicity to the project. Neither the Patanjali Food Park has been able to employ the locals of Nagpur so far nor MIHAN could take off, as expected. Few government institutions like IIM and AIIMS have started construction of their campuses in MIHAN, but that’s it.

Presently, the MIHAN project office has become a rehabilitation centre of retired govt. employees with good political backing. Nobody except a couple of officers understood that it is a business project and so it has to be implemented in a professional way. However, still the retired govt. officers kept functioning like the old government system taking orders from local politicians and other power centres. None has got anything to do with the business of MIHAN but the only interest is to maintain own ‘position with the benefits associated with it. This is the reason why there are so many litigations in the project only to help the lawyers to earn livelihoods. On one hand, the top politicians who hail from Nagpur are optimistic about the development of Nagpur, but the young professionals who want to return to Nagpur from metro cities like Mumbai, Bangalore and Pune are not finding enough opportunities to come back. Job creation is something every Nagpurian rather a native of Nagpur is expecting from MIHAN project. Every day we could see hundreds of youngsters visiting MIHAN in search of a job only to face rejection or a fake job offer from fraudsters.

Conclusion:

In order to make MIHAN, a success story for Vidarbha, few strategies that can be adopted and implemented immediately for the project to succeed are listed below:

Ø  The name of the company needs to be modified from MADC in order to differentiate itself from MIDC and get an independent identity. Even MIHAN India Limited, when termed MIL, is confused as MIAL, the company operating Mumbai International Airport.

Ø  At least MIHAN Project can be certified under ISO certification to streamline the activities and Standardize the processes. This certification can also be used as a marketing tool to attract new companies to MIHAN

Ø  The decision-makers for the project should at least be based at Nagpur so that companies can get the approval within least time improving ease of doing business(EODB) in MIHAN.

Ø  Dynamic Decision making at local level to be encouraged in order to speed up the process of allotment and approvals

Ø  Continuity in business has to be ensured particularly with the investors, which is lost due to the transfer of key officers

Ø  Retired staff from government organizations, out of which some of the staff is tainted with a suspension under corruption charges should be immediately replaced with young experienced officers

Ø  Succession planning has to be done in order to strategize the future path of the company

Ø  The process of approval is a tad bit slow as compared to what it was a couple of years back. An initiative of MADC Mobile App was started a few years back, but presently, even the website of MADC isn't updated. This needs to be fixed on priority as the website of any company is its face in the online world. If the website is not interactive, the company doesn’t seem interesting for the investors who are netizens.

Ø  A separate department having experienced officers and staff for providing exact information about the companies to the job seekers and arranging trainings for the incumbents for the positions available in various companies have to be created. The department has to work hand-in-hand with the business development team responsible for bringing more and more organizations in the MIHAN project.

Ø  Since Nagpur is at the geometric centre of the country, after GST, there is enormous scope for the e-commerce players to set up their warehouses in MIHAN. Accordingly, the warehousing sector may be promoted tweaking few rigid policies and discounting the land rate increased due to Patanjali's land allotment.

Ø  After the new state government resumed office, a delegation of American Companies had visited MIHAN in the year 2014, due to which Amazon started its warehouse in MIHAN. A similar conversion of leads is required in double digits to bring top companies in MIHAN.

These are some of the strategies that can be adopted with immediate effect without any major budget a sanction, in order to revive the MIHAN project and make it a success story for Vidarbha region.