Paying for Good Infrastructure

Is it better to have state-run pot-holed roads, or have swish six-lane highways that charge a toll that becomes unaffordable to some?

Luis Miranda
Published: 08, Apr 2014

Luis Miranda connects dots. He started investing in India's infrastructure a long, long time ago. He started IDFC Private Equity and was earlier a part of the start-up team of HDFC Bank. Luis has invested in and has been on the boards of companies like GMR Infrastructure, L&T Infrastructure, Delhi International Airport, Gujarat Pipavav Port, Gujarat State Petronet, and Manipal Global Education. Luis today spends most of his time, together with his wife, on non-profits. He is Chairman of CORO and Centre for Civil Society and Managing Trustee for Nadathur Trust. Other organisations include 17000 Ft Foundation, SNEHA, Muktangan, Sunbird Trust and Samhita Social Ventures. Luis graduated with an MBA from Chicago Booth and is a Chartered Accountant.


Image: Shutterstock

Last weekend the University of Chicago opened its Center in Delhi. This is the first major US university to set up such a facility in India. When I visited the center while it was being built, I was amazed at its location. It is in a building called Capitol Point at Connaught Place. Imagine an office in the centre of Delhi with lots of affordable car parking and just 15 minutes from the airport!

Capitol Point is an interesting joint venture between DLF and the New Delhi Municipal Corporation (NDMC) and houses multi-level car parking. This is the most sophisticated car parking facility of scale that I have seen in India. It has 11 levels with 8 levels of car parking, 2 levels of commercial space and the basement is a parking bay to drop off and collect your car. The commercial space is where the University of Chicago and other offices are located.

The parking experience is amazing. You drive into the basement, after the mandatory security check, and get your parking ticket from a machine that also takes a picture of the car before an automated boom barrier lets you into the basement. You then drive your car onto a pallet in the basement and get out of your car. Your car is automatically taken up to one of the parking levels and automatically parked till you return. The car park uses pallet-based technology on conveyor belts. The car engine is shut off when you drop off your car in the basement – so there is no pollution on the 8 levels where the cars are parked.  To retrieve your car you take your ticket to the air-conditioned lobby in the basement where a machine lets you know your total bill which you pay at a counter (the payment part has not yet been automated). While you wait for your car to come down you can sit in air-conditioned comfort, where you will be notified on a screen when your car is ready for you in the basement. The average collection time is less than 5 minutes. You then get into your car and drive out. If you have a driver, your driver can wait the entire time in the same lobby and can watch television, instead of sitting in the hot sun on the road. What an experience! All for just Rs.10 an hour.

Now here comes the sad part. The car park is hardly used by people in Delhi! Owners and drivers prefer to park on the road, possibly paying a higher rate or parking for free and blocking traffic, while their cars get heated up under the sun. What a shame. When I went there once I asked my driver to park in the car park and he was amazed at the cost and the experience. I asked him why he had not gone there before and he said that he wasn’t aware of the car park. So I hope that DLF and NDMC start advertising more about this excellent infrastructure that is priced so reasonably. The cost to park here is a fraction of what it costs in other major cities across the world.

There is more to come… In less than a minute one can walk from the University of Chicago Center in Delhi to the Shivaji Station of another state-of-the-art infrastructure project – The Delhi  Airport Metro Express. I have used this Orange Line many times and it is the most efficient way to get to the airport from the centre of the city. Once it took me just 45 minutes from Old Delhi to the airport during evening rush hour by using two of the metro lines. Last Monday I had a huge suitcase which was not difficult to roll from Capitol Point to Shivaji Station, take it on the escalators (which work), get it scanned and get onto the metro. In less than 15 minutes I was at T3 of the Delhi airport at a cost of only Rs. 120. The ride is extremely comfortable and the quality of the compartment and the infrastructure (including fully-automated ticketing machines) are just like the Hong Kong airport express and the Paddington Express in London. Yes, there were delays in getting this started and it had to be shut down for a while after it started for technical and commercial reasons. But this is by far the best way to get into Delhi from T3.

And here comes the sad part, again. Not many people use it. Maybe ‘sophisticated’ Delhiites can’t be seen talking public transport. Smart commuters from Mumbai tell their drivers to wait for them at one of the stations and thereby escape the crazy Delhi airport traffic. All for a fraction of what it costs in Hong Kong and London.

This finally brings me to a Reuters report that I found on the website of Tata Power some time back - “Counting the Cost of India’s Blackouts.”  This is an excellent note that reflects the sad state of infrastructure in India. To quote from it, “Is it better to pay more money for more electricity, or keep prices low and look forward to blackouts that will conk out offices, factories and homes in India? … Indian politicians must therefore strike a balance between allowing the private sector to make money, while at the same time protecting the interests of customers (and voters) in a country where hundreds of millions live below the poverty line … Is it better to have state-run pot-holed roads, or have swish six-lane highways that charge a toll that becomes unaffordable to some?”

I hope people in Delhi and the next government are listening.

  • Sampat Bhore

    Hey Luis, Thanks you so much for such a great information.

    on May 14, 2016
  • Uday

    Both the examples are taken from Delhi which is not representative of India. In cities like Mumbai or Bangalore, people are willing to pay but not much is being offered. It is incorrect to say people of India are unwilling to pay for good infrastructure, just that a few wish to have free lunch all the time in the name of poor.

    on Aug 8, 2014
  • Daljit S. Kochhar

    Hey Luis, Both the airport line and the parking are fantastic. Their limited use does not stem from the sophistication of the Delhi folks. It has to do with the (a) lack of awareness/ marketing spread by the corporations running them and (b) cardinal sin of setting up a Taj Mahal for a gazillion rupees but not making the effort to spend a few lacs towards fixing up the choice architecture (trying hard to fit in a Booth buzz word). Firstly, the car park. If you ever visited a DLF shopping mall, you'd realize how totally incompetent this group is in setting up car parks in their basements. However, they have totally redeemed themselves with the Capital Point. It is better than anything that I have seen in the US. For Rs. 10/- per hour they have to be running this at a loss - most malls charge at least Rs. 40 - 60 on weekdays. I am happy to spend the money despite my Delhiness to simply ensure that my car does not get scratched, dinged, keyed or urinated upon if I leave it on the road for too long. In the long run, one comes ahead. However, unless I have to visit the Center, the Hanuman Mandir or perhaps go across the road to Bikanerwaala, there is little reason to use the car park. The walk to CP inner circle is simply not convenient. Yes, I am able bodied and 1.5 kms may not seem a lot, but doing it without proper pavements, in 45 degrees (soon enough) or at night with stray dogs running or the drug addicts outside Hanumnan Mandir. A simple air conditioned mini-van ride to Palika Bazaar or better still, Starbucks and Wengers in Block A will go a long way. As for the airport metro .... it is simply f- awesome. Truly world class. I use it all the time - but have to keep a driver waiting at Shivaji Stadium. My first ride on this train came in for a rude awakening in trying to flag down a cab/ auto at 11 pm on Baba Kharag Singh Marg. At last, it was my Delhi language that finally convinced an auto-walla in then Arvind Kejriwal's Delhi to give me a ride to my home. Now, this airport metro most certainly can use more awareness. It can also use a mini-bus service to Rajiv Chowk metro station (1.5 kms away) that is one of the biggest metro stations to connect Delhiites to the entire city. It most certainly needs a taxi/auto rickshaw pick-up service. Borrowing from Charlie Wilson's War .... They were glorious and they changed the world... and then we fucked up the end game.

    on Apr 13, 2014
    • Luis

      Daljit, thanks for your detailed Chicago response! Yes, everything is not perfect yet ... The concept of a chauffeur parking a car in a car park, instead of on a road, hasn't caught on yet. And Inter-modal transport connectivity continues to be a problem for urban transportation in India ... the concept of good urban planning exists only in the minds of people.

      on Apr 20, 2014
  • Ramesh Subramaniam

    Glad to learn about these developments in Delhi.. as you say, if DLF and NDMC can build better awareness then usage will pick up

    on Apr 10, 2014
    • Luis

      Hope we will see more of such good infra across India ...

      on Apr 11, 2014
  • Saurov

    I have tried almost all the facilities mentioned in the article and the comments below. In Delhi the Express Metro is a "shocker" (lol, in positive, you think how did they get it right and up) ... but the squabble between the authority has led to dilution in operation & cost rise. Delhi''s major Infra flip up was Common Wealth Games, a lot of parking bay, bus stands, pavements (which is of daily use & affects us all) got revamped & expanded, but its falling of now due to lack of maintenance. Bombay is way behind is terms of per capita Infrastructure provided, & only in the last 10 years ther's up tick on it. The new International Terminal Airport is a double thumbs up, but again the pickup & drop with public transport is a disappointment. The Freeway is well planned & has cut down travel time substantially but the entry exit points eats way. We plan, mean well but don’t execute in full in plugging the gaps beyond the drawing board. The plan on paper when executed on land will awalys have mean deviations. We will get there.

    on Apr 9, 2014
    • Luis

      Saurov, thanks for the feedback. One of the great features of public infrastructure projects in India is the "Build-Neglect-Rebuild" model! It is unfortunate, but maintenance spend is low across the country. And while there are issues with the declining service of the Delhi Airport Express, it is still great - I took it this morning. Of course, every thing doesn't get executed properly - the approach road at Worli of the Bandra-Worli Sealink is a classic example. Yes, we will eventually get there, as you say :-)

      on Apr 9, 2014
      • Saurov

        Much appreciate your reply. There are is so much to talk about India's Infra (endless). A desert city like Dubai have pavements with gardens, & SriLanka has proper defined marks on roads, Bhutan & Vietnam have a clean look (deliberate examples taken). Some majors we will be tracking are the DMRC (7 news cities, wow!!) and the Eastern corridor and developing 20 odd small airports. Future is great and we will get there.

        on Apr 11, 2014
  • Luis

    Mansi, yes ... in Mumbai the elevated road to the airport (private) and the elevated eastern freeway (public) are also good examples of great non-tolled infrastructure.

    on Apr 8, 2014
  • mansi khambata

    I think in general people have been so disillusioned with poor infra in India that there is an attitude of disbelief at any improvements. But i agree, we can avail of world class facilities at a fraction of cost if higher charges are implemented. and ppl are likely to adapt willingly after an initial "surprise phase" - mumbai sea link maybe an example!

    on Apr 8, 2014
  • R Sriram

    Thank you for another useful and thoughtful article Luis.

    on Apr 8, 2014
    • Luis

      Thanks, Sriram. I hope you have tried the Delhi Airport Express.

      on Apr 8, 2014
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