The Hindu Business Line : Toweringly pragmatic

A class on cost accounting gets especially animated when the topic revolves around cost-cutting. This is not at all surprising given the fact that we Indians are basically thrifty by nature and often repent going on a splurge.

Maninder Singh, who normally prefers the safety of the last bench, enthusiastically put up his hand when I invited examples on cost-cutting. Brushing aside the asides, he said “Sir, Bharti, Vodafone and Idea are going to share the towers. This will result in huge savings for all of them, Sir”, he sat down casting a triumphant glance all round.

Sharing and saving

“How come? Will they not fight with each other for preference?” shot back Navjot Kaur.

“No my friend, the very idea of sharing towers is to reduce unnecessary investments on towers which happens if a service provider insists on having his own towers all over the country,” said Maninder helpfully. Gone was the chip on his shoulder.

“Sir, this reminds me of the initiative taken by ICICI Bank in sharing ATMs. I think the purpose is the same as with tower sharing,” offered Preeti Subaraman rather diffidently.

“You bet the purpose is the same,” said Maninder springing to his feet apparently warming to the subject.

“In that case, Sir, why are our oil marketing companies not having common pipelines across the country to ferry petroleum products from refineries? That would avoid duplication of costs”, said Mool Chand Garg whose father operates a string of petrol bunks in Delhi.

I decided time was now ripe to take control of proceedings, having sufficiently ignited passion amongst the students. Be they towers, ATMs or pipelines, I declared grandly, joint ownership of such infrastructural facilities results in tremendous cost-cutting. What Bharti, Vodafone and Idea are going to do is something they should have done much earlier.

But like they say, it is better late than never. It is the done thing in Europe and the US.

On the petroleum front, bulk of the products is transported through lorries and tankers, which is clearly the most uneconomic mode of transporting these products.

It is good that we have allowed the Malaysian company Petronas to construct pipelines that would be offered to the oil marketing companies to move their products from their refineries to consumptions centres. The charges paid to the pipeline infrastructure company would be much less than what is spent on lorries and tankers given the fact that repeated handling charges would also be avoided.

A different pitch

“Sir, will BCCI and ICL learn any lesson from this,” queried diminutive Chattapan

“Don’t talk irrelevant things, yaar,” pleaded a group of students almost in unison.

“But Sir, what I am saying is very much relevant. Why can’t they form an infrastructure company and build beautiful stadiums with sporting pitches and share them,” pleaded Chattapan.

“Well, when towering personalities are involved, they must first be brought down from their high horses,” I said half-sure whether my students have understood my rather philosophical wise-crack.