Published On : Fri, Jul 15th, 2016

MIHAN – Too many slips between the cup and the lip

FedEx Air Mail Service

FedEx copied Indian Night air mail service 30 years later (Representational Pic)


Nagpur:
Old time Nagpurians will remember a sight we saw daily at 12 midnight that filed us with pride. We took all our outstation guests to look at it – “this is OUR Nagpur; you can see this only here!”

What was the unique scene?

It happened at the Nagpur Airport, otherwise a nondescript place, but at midnight it came alive. Lights were blazing on the tarmac, within the airport building and there was always a throng of people.

On the dot at this hour, four ‘jumbos’ would land at the airport one after the other and then line up parallel facing the main building. Men would jump out of the planes carrying sacks and boxes and get busy. They would carry them inside the terminus and sort them out with the speed and efficiency of robots at work. No soon they were done, these would be loaded back on the planes, and then they would take off again – back to where they came from.

These were planes coming to Nagpur from Delhi, Madras ( now Chennai), Bombay and Calcutta. This was a unique Night mail service of India with Nagpur at its hub. As ‘Tales through times’ describes the operation:

‘On 30 January 1949 the government inaugurated the Indian Night Air Mail Service- the world’s first overnight air mail service- keeping in mind, that FedEx as Federal Express launched its overnight package delivery service only in 1973 at Memphis, Tenessee. Since space was a premium at daytime flights, it was decided that air mail would move at night and this had the added advantage of making overnight delivery possible in what may very well be also the world’s first example if not one of the earliest examples of a hub-and-spoke operation. Under this system, the four main cities of India also happened to form each of the four corners of a diamond- New Delhi to the north, Bombay to the west, Calcutta to the east, and Madras to the south. Connecting these cities was a central location at the city of Nagpur in central India.

The system was quite simple- letters postmarked for overnight air mail were delivered to each of the corners of the NAM system in the evening and loaded on aircraft. These aircraft, all then flew in the first part of the night to the central processing and sort facility at the Nagpur Airport. Mail would be offloaded and sorted to waiting aircraft that would return to their origin airports in the second half of the night. The following morning, the mail would be delivered- a speed and convenience not only unheard of in India’s business environment of the day, but probably in just about any business center worldwide in 1949! For an aircraft like the Douglas DC-3 that was ubiquitous in those days, each leg would take about four hours, making overnight delivery possible. To facilitate the sort process, any aircraft leaving any of the cities already had the mail sorted and stowed aboard in batches, minimizing the ground sort and loading time at Nagpur. ‘

This system was later discontinued, but restarted briefly in the 1980s.

Taking inspiration from this successful and innovative operation, international consultancy firm Ernst and Young suggested a modern take on this that would exploit the unique position of Nagpur in India to make it a cargo and logistics hub. But this time, on an international level. Thus was born the idea of MIHAN – multi modal international cargo hub and airport at Nagpur.

The idea was simple. As Nitin Gadkari and other politicians of Nagpur explained to the local populace, more than 200 aeroplanes criss- crossed over Nagpur airspace everyday. Most of them needed to land once midway in their journey for re-fuelling. Cities like Mumbai and Delhi charged exhorbitantly for landing and fueling services since they were very busy international airports already and space was at a premium. Nagpur had no such issues and moreover there would be no detour involved since they were already flying over the city. They would be offered very lucrative and unbeatable fees for the service. And since they were going to be landing anyway, why not use Nagpur as a destination for exchanging and carrying cargo? On the very lines of the Night air mail service…

And since these were going to be mostly commercial, passenger planes, why not promote Nagpur / Central India as a destination for foreigners aboard the planes? Why not indeed? Nagpur could be the epicenter of ‘Tiger and wild life tourism’ – a kind of tourism that is taking on globally. ( Tourism is the fastest growing international business). Also, since Nagpur already has a huge Govt. Medical College and attracts patients from all over Vidarbha, M.P. and Chattisgarh, why not make it a destination for international ‘Health Tourism’ too? To this end, the world famous John Hopkins teaching hospital of USA was also enticed to open up a large Hospital in collaboration with the Care group, H.Q. in Hyderabad and big facility in Nagpur already, at MIHAN.

So, soon after the idea of the international hub was envisaged during late 1990s, when BJP – Shiv Sena were in power in Mumbai for the first time, and Nitin Gadkari was the popular PWD Minister, the above plan was firmed up.

As author and entrepreneur Amar Vyas, who is now writing a book on the subject called ‘Mera Bharat Mihan’ noted in his research paper on MIHAN for IIM, Ahmedabad in 2010-
‘The idea for the multimodal hub at Nagpur was first floated in the 1990s. On November 25, 1997, the government of Maharashtra originally appointed City and Industrial Development Corporation (CIDCO) as its nodal agency for the development of the cargo hub at Nagpur. However, due to paucity of funds, the Maharashtra State Road Development Corporation (MSRDC) was appointed nodal agency on June 7, 1999. In 2002, the Maharashtra Airport Development Company Limited (MADCL) was constituted by the Government of Maharashtra as a Special Purpose Company. In 2000, pre-qualification bids were invited for conducting the techno-economic feasibility studies (TEFS) for the MIHAN airport. Twenty-one private sector companies submitted pre-qualification bids in July 2000.

The bid for the TEFS was won by a consortium of consultants, lead by L&T Ramboll (a joint venture of L & T of India and Ramboll of Denmark) along with Unique Zurich Airport, and Crisil Advisory Services.

The TEFS recommended developing the existing domestic airport of Nagpur as an International Passenger and Cargo Hub Airport, including a Special Economic Zone (SEZ).

Incentives to attract investment
In order to attract investors, the MADCL offered to hold a 49 percent stake in all projects that were to be developed on a Public Private Partnership (PPP) model. The than Vice- President and Managing Director of MADCL, R.C Sinha, informed the media in an interview that MADCL would float a special purpose vehicle for each facility of the project. MADCL also offered to pay a penalty at the rate of 10 percent per annum if it was unable to complete the infrastructure development works in time, after private agencies had purchased land within the MIHAN area.

Early developments in MIHAN
In 2006, US based computer manufacturer Dell showed an interest in setting up a manufacturing facility on 70 acres of land. DLF, the largest real estate company of India offered to develop a 140-Acre SEZ in Nagpur. The company planned to invest an estimated Rs 2,000 crore on developing this project and generate employment for about 50,000 people. The total work within the IT Park was planned to be 8.5 million sq ft, and was scheduled to be completed in three years.

In November 2007, the government of Maharashtra proposed to develop a mass rapid transport system (MRTS or Metro, as we call it now) to cope with the growing demand and population of the city. The MADCL along with Nagpur Municipal Corporation (NMC), Nagpur Improvement Trust (NIT) and Maharashtra Industries Development Corporation (MIDC) were the main agencies responsible for coordinating this

The planned development of MIHAN sparked a real estate boom in Nagpur area. The Gurgaon-based Radisson Group started work for a five-star hotel with over 200 rooms. Mumbai-based Fariyas Group,having premium properties in Mumbai and Lonavala, acquired lands to set up a 200-room five-star hotel in Nagpur. Other hospitality majors such as The Kamat Group, the Orchid chain of hotels, the Sun and Sand Group, Hyatt & Leela purchased land and planned to develop hotels near MIHAN. The Taj Group also proposed a hotel a development known as Empress City. The conglomerate Sahara India Pariwar was developing Sahara City Homes, a 106 acre development, which included amenities such as schools, parks, swimming pool, and a sports stadium. Sahara planned to complete the project in 2011. Mantri Realty, a Mumbai-based real estate major, planned to invest around Rs 1,600 crores for a 300-acre township project near Nagpur.’

All sounds very wonderful and exciting for Nagpur, doesn’t it?

If only the story had developed as per this script! But it did not…

What were the reasons for the delays and derailments of planned projects?

Was it that after the Congress- NCP alliance came back to power the new government put this project on the back burner? But looking to all the subsequent developments after change of governments, this does not seem to be the main reason. Remember, MIHAN seemed like the cash cow of not just Nagpur but entire Vidarbha then and everyone wanted to grab the credit. The first decade of 2000, in fact saw BJP and Congress Nagpur politicians vying to take credit for MIHAN and coming together often on the same stage to attract investments, from private citizens for real estate, as well as big conglomerates.

(As happens in India unfortunately, as soon as some mega development of some area is slated, but not yet disclosed publicly, politicians with friends and family start grabbing land at cheap rates from unsuspecting local farmers. They build a good ‘inventory’ without actually doing sale deeds, only MOUs, so they can unofficially carry the deal forward at enhanced rates and get their ‘commissions’ on the deals. So all ‘leaders’ have a vested interest in seeing the project go through so their investments can pay off.)

There were some state vs. centre hurdles too. At the core of MIHAN was the Nagpur Airport that had to be either built anew or expanded and modernized for the grand plans to be implemented. But all airports come under the purview of Airport Authority of India, which falls under Union Ministry of Civil Aviation. For the sake of cohesive planning and implementation it had be brought under the jurisdiction of the state government. The ‘handing over’ wasn’t smooth and still isn’t complete! (Whether Prafull Patel and NCP were to be blamed for it is a point that has been argued ad infinitum.)

Secondly, MIHAN M.D.s changed and the one perceived as being dynamic and decisive, Sinha, came under a cloud for some allegedly ‘dubious deals’ and had to leave.

Internationally, the economic scenario changed and depression hit USA badly with the collapse of Lehman brothers. As a result John Hopkins hospital backed out of their joint agreement with Care.

If business and share market is all about sentiment, this sentiment of optimism around Nagpur began to rapidly decline.

Sahara City languished for its own reasons. ‘First City’ to build which mandate seems to have been given to Reatox Builders with technical and legal flaws was withdrawn from it in some years. Now after two court cases, one in the Supreme Court, it seems the same builder is back in favour again! (With another change of governments after 10 years).

And meanwhile, the first premise on which the international hub was planned – that planes flying intercontinental distances need to refuel – became redundant with latest technology aircraft able to fly long distances non-stop.

The work that should have gone it to develop Nagpur as the ‘Tiger capital’ of the world never began and the concept of Medical tourism also fell by the way side with Hyderabad, Banglore, Delhi and Pune developing as more reliable destinations for health care.

In short, MIHAN is living proof that governments, for all their good intentions, do not have the systems in place for effective industry and business management. A C.M. and his Ministers have to look after a lot of other issues and do not have either the time or inclination or discipline or frame of mind for fast track development of Business models. Specially if it is located far away from your centre of power, which in the case of Maharashtra is Mumbai.

Can MIHAN still be revived? What are the options? We shall explore them in subsequent write ups.