The Electric Car Humbug

Recently a friend sent a write up about Tesla Motors. Tesla is a glamorous American company promoted by Elon Musk, of the improbably exotic name, to make glamorous and sexy electric cars. Musk made his megabucks when Pay-Pal was sold to eBay. Tesla gets him the admiration of the greenerati, the glitterati, the literati, the chatterati and the ignoranti.

Closer home, in Bangalore, Reva Electric Car Co. has mounted a mis-shapen plastic biscuit box on a golf cart and are touting it world-wide as an electric car. The Maini family, promoters of Reva, have been dining out on it for years now. In Europe the Reva is classified as a quadricycle and enjoys all kinds of fiscal and operational incentives. In India it just gets occasional press coverage.

Since so many otherwise sensible people suspend thinking just to be on the correct side of socially and politically sensitive subjects, and some have even bought them, I thought I should put down some real hard facts about electric cars. No opinions.

1. Electric cars, electric car companies, electric car designers and finally electric car entrepreneurs are not about cars. They are all about battery technology. More accurately, about storage battery technology.

2. EC's run on storage batteries. In simple words, put in X kw into a magic box. Put the box and an electric motor in a chamber on wheels. Draw power from the box to drive the motor to turn the wheels. What you get from the box is Y kw. This is inevitably less than X and depends on battery efficiency in absorption, sustainment and discharge.

3. No one has yet got a battery design which begins to be viable even at reasonably large volumes, say 5% of all cars. At least not without major state subsidies and a complete disregard by the customer of personal cost benefit analysis of ownership and running costs.

4. The second element of an EC is the electric motor. A lot of incremental work is happening but no one is even talking about making great breakthroughs in motor technology.

5. The third element is the chamber-on-wheels or the car itself. Here many improvements happen regularly or await commercialisation pending the car makers' idea of customer acceptance. Traditional car makers have been working forever on new materials, fabrication techniques, friction reduction, safety factors, chamber design, drive transmission and braking systems etc. Most of these, as also peripherals and accessories, are independent of the motive force. When developments occur, they benefit cars of all types.

6. Finally, the ultimate deal buster – the electric car by itself is not the solution to anything. Electric power has to be generated somewhere. Much of it comes from pollution spewing coal burning plants. The best of coal plants are worse than the best of internal combustion engines. Much worse after the cost of transmission, transmission losses and factor Y mentioned above in battery loss is taken into account. A smaller portion of grid power is produced also by ecology destroying hydropower plants or potentially earth destroying nuclear technologies. Some power is, of course, also generated by petro-product plants, rather like the old car that you drive around.

Apart from power generation issues, providing the logistics and creating the infrastructure for wide-spread recharge facilities 'away from home' and 'at home' could be a nightmare. No sensible estimates exist of costs and resources needed.

There are also, of course, largely unexplored, but major pollution issues with fabrication, transportation, usage and disposal of storage batteries. I could write a book on the subject but enough said.

All said and done, Electric cars are nowhere near being viable or anywhere near as green as they are made out to be. I would very much like someone to come up with solutions. Some day soon.

The Masters of the Universe

The latest kick in the collective rear of stock markets worldwide was delivered by the HSBC bank with its record losses a few days ago. I have had a bit of exposure to this august institution. Five years ago I was, rather me and my wife were, sold a portfolio management service by the local branch of HSBC. Represented relentlessly and ably by a team of smart smooth talkers. I am not easily impressed by power-point presentations and rehearsed sales talk, but these guys seemed to have researched the numbers and to know what they were talking about. I do not know to what extent I was influenced by the presence in the team of a fit twenty-something. Anyway we got suckered into committing a largish sum of money to the care of HSBC financial services. The first thing that happened after the money was transferred was that we stopped hearing from the bank. The next thing that happened was that we found it difficult to get hold of them. Unfortunately they also made a lot of bad investments on our behalf. Were reluctant to rectify. Were tardy in revising when they did decide that they had erred. Eventually we pulled out and took control of our own investments back from them. As expected by now, they were slothful in executing transfer documentation. And then started the fun. One month after the account was closed we started getting multi-page account activity and account balance statements. These are printed on expensive paper, inserted into expensive envelopes and couriered through an expensive document delivery service. And they show NIL activity and NIL balance - on two separate sheets. And they come in duplicate - one for my wife, the first holder and one for me, the joint holder. Followed, inevitably it would seem, by end of year summaries in April every year. This has carried on for close to five years now. After some time we stopped wasting time and money trying to tell them to stop. A few months ago we also got a warning to the effect that HSBC had noticed NO ACTIVITY in our account and if we persisted in our errant ways they would be obliged to freeze the account. No such luck. This morning the courier dutifully delivered my copy of the NULL statement. The other shoe should drop shortly.

Superpower Two

A friend called to say that the superpower post was too oblique. There was a need to explain. So here goes.

The post was aimed primarily at those concerned by Barack Obama’s campaign promise to ‘do something’ to discourage outsourcing and encourage local employment. This was to be done through tax incentives because in a market economy not much else is available to the U.S. government.

Also inspired by

• Those who keep talking about India as an emerging superpower when a large percentage of people (exact numbers are irrelevant) go hungry to bed, children go without education, sick go without healthcare, elderly have no financial security etc. You know the list. We could make a substantial difference just by stopping collection of data on poverty and wasting time and money on debates and conferences about what actually constitutes poverty. And diverting the money to improving any of the many areas crying for resources.

• The Thackeray clan’s fulminations against those who come seeking a living in Bombay. South Indians earlier and north Indians now, doing jobs no one else really wants. Gujaratis and Parsis who create jobs are never targeted.

• And finally, by the HDFC life insurance advertisement where a bald man seems to be planning to send his wife to Singapore to work as a maid. Because HDFC life insurance did not exist when he was working and should have started a retirement plan!

Back to Obama. This is one area where there is not much that he can do or will want to do. In fact in a global downturn more and more companies will look to shave costs to survive. Tax incentives can’t help because the corporate tax rate is lower than the cost differential. And Indian costs can be reduced from current levels by about 50%.

Given job loss or pay cut everyone will opt for the latter. Lower income differentials and less social tension all round. My cardiologist might start earning more than my semi-literate uneducated phone banker once again.

As far as superpowers are concerned, the real power lies not in Indian Navy shooting at a few unemployed people playing pirates with toy guns off the coast of Somalia or in the ability of the good Dr. Singh to switch off the phone lines to America.

Real power lies with buyers and sellers of goods and services who can dictate pricing for what they buy, think Nike, and also for what they sell, think Boeing. This, dear reader, comes from creating products and services others want and covet. And then getting slave labour, by whatever name called, to make those in sweatshops of China or deliver from cubicle pits of India.

Previous: The Real Superpower

The Real Superpower

The lady who manages our household is from the Coorg district of Karnataka. Racially the Coorg do not seem to have much in common with the rest of the country, least of all with the south where they are ensconced. Legend has it that the Coorg are descendants of the remnants of Alexander’s army. Coorg is the only district in India the residents of which have the right to bear arms, and they do. They do not yet have, however, any stated ambition to go independent.

Our lady manager has been with us for twenty years now planning our meals, preparing them, managing our laundry, making sure we take our respective vitamins or, when sick, medication and generally looking after our welfare. She also answers the phone and manages all outsourced services like ironing, plumbing or electrical repair. She is literally invaluable, no one knows how much she is paid.

Over her longish association with us, a lot of her siblings, other relations and friends have moved into Bangalore and are now gainfully employed in industry and businesses ranging from healthcare to financial services as also in the armed forces. They all come in and she helps them out in various material and other ways until they get, so to speak, their green card.

In the process Coorg has become a superpower. Much as India has over the last few decades. We do it by sending our best and brightest to foreign shores . We also do it by sending the second best to call centres to answer phone calls from rich customers of rich companies from rich countries. We solve their tricky tech problems or answer stupid questions about their credit cards. We write code for software conceived and planned by others in places where local culture permits innovation to happen.

In the recent economic downturn, we as a family have taken a bit of a haircut. As has India.

One thing is clear, however. Coorg has nothing to fear. We need our manager and her cohorts. Much as the developed world needs the "people power" India provides. In spite of recent big talk of India emerging as a "Superpower", we know who calls the shots when the chips are down, as does our house manager.

Next: Superpower Two

Educating Sita

Recently I got roped in by my current wife Kusum to correct 10th standard term papers for a Bangalore school. She is a volunteer teacher/ guide/ adviser/ bully/ help attached to the school as part of a support group Each One Teach One.

I cheerfully accepted the commission and entered a nightmare wonderland from which I hope to partially recover by unloading here the thoughts that crossed my mind as I went through the soul destroying task.

The subject was Social Science, incorporating Sociology, History, Geography and the like. There were sixty MCQs or multiple-choice questions.

A bit of background here. I was introduced to MCQs in 1960 when Punjab University set aside 20% marks in the school final exams for such questions. My batch was the first to get exposed to the newly adopted process. The concept, very patiently explained by my ancient and forbidding, but in retrospect middle aged and kindly, headmaster, was to change my life.

MCQs were meant to test not ability to memorise, as the excruciating mainstream testing and evaluation process did, but understanding of concepts, ideas, logic, context etc.

I embraced the new testing process with glee and gratitude. This great departure in testing was to later ease my admission to ISI.

During my years at ISI contributing to question banks and correcting MCQ papers helped me earn money for beer and movies, not catered for by my scholarship. Fifty years have gone by in the blink of an eye and now I get to see where we are today in terms of using MCQs as a testing tool.

No words can explain better than a few actual examples.  

Critical knowledge in 2008 for the budding
Historian: Tantia Tope seized Kanpur in June 1857: a) 17 or b) 27
Adventurer: Albuquerque came to India: a) 1509 or b) 1510  
Lawyer: Which Act came first: a) Minto-Morley or b) Pitts  
Fundamentalist: The Arya Samaj was founded: a) 1874 or b) 1875
Educationist: The Mysore University was set-up: a) 1915 or b) 1916  
Political Scientist: The HR Ministry was set-up: a) 1985 or b)1995  
Banker: The Reserve Bank was set-up: a) 1935 or b) 1947  

And gems for the future Statistician/Economist:
The number of industrial estates in India is about: a) 585 or b)586
The share of agricultural income in India is about: a) 35% or b)36%

Do note the marvellous use of the word “about” in questions which seeks discriminating precision in the answers.

Enough said.

I hope, dear reader, that you are going through life comfortably without the benefit of the stupendous knowledge the Indian education system is providing, and testing for. I have used actual questions and answers without needing to exaggerate to make a point. For better readability I have shown only two idiotic options whereas actually there are four equally stupefying ones for each question.

To be honest there are also five or six questions which actually test for meaningful knowledge or understanding. I should add that the test paper adheres to the typical Government style type-setting and layout. It is full of typographical errors. Alternate line mixing of English and Kannada versions of questions makes it unreadable even for people proficient in both languages. Three questions are mangled to the extent that all students have to be given free marks. And, finally, the evaluator is expected to go about her job without the benefit of a set of correct answers much less an evaluation template.

The whole idea of MCQs creation and evaluation has been stood firmly on its head. Spare a thought for the poor kid who got it wrong and will forever go about his business not knowing when her life could depend on the exact date of creation of The Central Warehousing Corporation. Or the one who got everything right but wishes she had spent her time learning about what actually happens at the Indian Institute of Science rather than memorising how many acres of land it occupies.

Finally to cap it all, this masterpiece of educational testing is not created by some semi-educated clerk in the education department but issues every semester in the name of the “Headmasters Association of Karnataka”. Cheers.

A Refugee's Take On Kashmir

I was born in 1947 in what is, for now, Pakistan. Come partition my parents were in different cities and migrated separately. My mother from Karachi by ship to Okha, a small port in Gujarat, with me and her parental family. My dad escaped hidden under suitcases in a police jeep driven by a muslim officer, by road from a small town near Lahore to Amritsar. Neither knew if the other had survived the killing and mayhem that left millions displaced and hundreds of thousands dead or maimed.

It was a few months before they were reunited. This happened when my maternal uncle by chance heard my father's name while he was standing in a mess of a queue in a Delhi centre to register refugees. The people taking my father's name, not in vain as it turned out, were my paternal uncles. Ears perked up. Questions were asked and a link was established. Lost and found.

Paradise in the making
I grew up in Ferozepur - within walking distance of the border with Pakistan. The city had an atmosphere free, surprising in retrospect, of fear or loathing for those across the border. My parents also exuded a positive outlook although they had arrived as paupers and had seen, at close quarters, the horrors of mass migration under duress.

Overall the upbeat ambiance was enhanced by stories of the freedom struggle and how Gandhi had led the country to freedom without resorting to violence. The unstated sub-text was that militant freedom fighters like Subhas Bose and Bhagat Singh had failed to achieve any results and but for Gandhi we would still be ruled by the Brits.

The promise was clear. India will be a secular non-aligned country. It will lead the world towards peaceful co-existence of peoples and nations. It will propagate human rights world-wide and abolish the caste system at home. It will provide education and healthcare for all and banish dowry, booze, gambling, prostitution and satti. It will revolutionise agriculture and build industries to rival the biggest and the best anywhere.

Mohammad Rafi was all this time singing patriotic songs from every street corner loudspeaker exhorting me personally to take over the baton from those who had moved on.

A discordant note
Amidst all this euphoria there emerged one element which rang false to a youngster with no pre-conceptions. Kashmir.

The Hindu ruler of the Muslim majority state had been dilly-dallying about whether to join India after independence. Fearing an uprising supported by Pakistan he hurriedly signed an accession agreement with India in October 1947. This provided Kashmir a special autonomous status with its own prime minister, constitution and flag; and control over all activities except communications, foreign relations and defence. A letter from Louis Mountbatten, the Governor General of India, promised 'a reference to the people to establish their wishes'.

This agreement was quickly followed by a Pakistani invasion in support of marauding tribal hordes. The ruler requested help from the Indian army and fled to Jammu.  India drove the invaders back but when the job was only half done, Pandit Nehru, in his unlimited wisdom, inimitable style, and against the advice of his cabinet colleagues, particularly the hawkish Sardar Patel, called a unilateral halt to hostilities and took the issue to the United Nations.

The newly minted international brotherhood of mankind mandated a plebiscite which was accepted by India. Taking the high road, India proclaimed it repeatedly from various platforms, including the floor of the parliament. I have lost the exact words but phrases like 'we will not keep Kashmir by force' and 'wish Kashmiris good luck if they choose to go their own way' were used and stuck in my memory.

... and promises to break
I must have been some ten years old when it registered that India had made promises to Kashmir and its people that it was reluctant to keep. Suddenly one day we were no longer in favour of a plebiscite. Undoubtedly Pakistan wasn’t doing its bit to fulfil the pre-conditions in the U.N. resolutions, but we were the good guys. Or were we? What were we afraid of? If we were putting together such a utopia how come Kashmiris were dying to get out? And how come Pakistanis and Kashmiris living across the border were not dying to get in?

The promised autonomy did not last long. By 1953 much of it had been dismantled. The prime minister of Kashmir, was arrested and would be jailed on sedition charges. The state militia had been put under the control of the Indian army and would later be absorbed into it.

Meeting Kashmir
I had my first direct exposure to Kashmir and its people when I was thirteen or so during a two week boy scout jamboree in Anantnag. The natural beauty of the valley is awesome. The poverty of the people awful. The kindness and hospitality of the people was heart-warming - but shown as to people from another land. Fine people they are but they do not think or talk like they belong to India. The eastern provinces and their issues came into my consciousness much later. And did not help matters.

I do not know if the partition of India was preventable. Those who were in a position to do so obviously did not have what it would have taken. I do know that it did not solve anything this side of the border or that. And Kashmir became a perpetually unfinished business.

Kashmiris have not had a fair deal. When we say Kashmir is an inalienable part of India we seem to talk of the land and not the people. The vast majority of people have remained way behind the rest of the country on all parameters. If at all they appear in the popular consciousness it is as vendors of tawdry handicrafts and carpets, made mostly in Ludhiana. Or in the background, as service providers, in the romantic movies shot there when there was peace in the valley.

An untenable state
Kashmiri politics and administration has always been on a roller coaster ride and the populace has grown increasingly restless. For the last few decades, some elements, supported by Pakistan and sundry trouble makers from across the border, have taken up arms and terror to get free of India.

Our response has been to deploy the army with almost unfettered powers to quell militancy and drive out the infiltrators. There is hardly a settlement which has not lost people to firing or bombing from this or that side. The midnight knock and kidnapping or arrest are not clichés here, they are a fact of daily life. Hardly a family has been left untouched by tragedy. Human rights violations are reported virtually every day. And all this so we can keep Kashmir.

May be we can keep the land. But what about the people? You can't box them in. The countries on the wrong side of the Iron Curtain tried every trick but failed. Pakistan could not keep Bangladesh. The list goes on forever into the past. And no doubt will into the future.

The Kashmir conundrum has troubled me for over fifty years now. So even if I believe Pakistan:ISI:Devil::Angel:RAW:India, the Kashmiris do not seem to see it. And I see no sign of a plan to win them over.

They are and always will be Kashmiri nationals. Let them choose their citizenship.

Nano-a-Nano

Mamatadi is an obnoxious person. In the Singur case, however, Mamatadi is right - maybe for the wrong reasons.

I am an unabashed free market believer. A genuine free market, however, is not a free for all. It has to be regulated to deliver decent and fair treatment to the weaker amongst us. This is best done by creating a level playing field by reinforcing the weak without holding back the strong.

There is no reason the landholders should not get the market price, just because Mr Tata - fine person though he is - likes that location.

Aha! But, you say, "they have already been paid the market price and then some."

Ah! I say, "What is the market price?"

It is not the market price of under-productive farmland. The market price of this land is the price after it is converted to industrial use.

For reasonable price discovery one needs to get a few commercially savvy market professionals on both the sell and the buy sides. One way is:

1. Pool together fallow land at suitable location to set up an industrial estate.
2. Invite the top 10 infrastructure companies in India to bid in an open auction to develop the land to pre-set specifications. The successful lowest bidder is free to exceed the specs to improve marketability.
3. The developed land will be offered by open auction to the anyone who qualifies by putting up a security deposit.
4. The difference between the sale price and the development cost as bid will be split 10% for intermediaries - 90% of original landowners.

The exact ratios and numbers can be moderated within 5 points or so.

Having worked for Mr. Tata, and knowing a lot of people who do work for him, I am sure they would be happy to pay a fair market price for the land they need. 

Unless, of course, they found a way of getting it for less. And why not? They owe it to their shareholders. It is up to the rest of us to safeguard the rights of people on the other side of the table.

Cool Superpower

The Economist has just run a special feature on alternative energy. ALTERNATIVE ENERGY. Made me sit up and think. 

• Indian companies or institutions featuring in the all-encompassing study - NIL. 
• Indians working in India featuring in the study - NIL
• Come to think of it Indian originated science and technology advances in last sixty years - NIL
• Indian originated products wanted by anyone else over the last sixty years - NIL 
• Indian originated services wanted by anyone else in the last sixty years - NIL 

On the other hand 

• Indian public schools without full teacher strength - 50% 
• Indian children who are malnourished - 50% 
• Indian young mothers-to-be without medical care - 50% 
• Indian seniors without pension / healthcare - 75% 

Who are these people who talk about super-powerdom? Emerging or otherwise. Where do they live? What do they read and see? What do they think? Why don't they think?

 

ps: The rare Subeer Bhatia, Vinod Khosla et al who live and work in a different culture do not count for this purpose. 

pps: "Monkey-see Monkey-do" products and services do not qualify. 

ppps: The country is in turmoil over some Government land in a Muslim majority state being given, needlessly and stupidly, to a Hindu temple trust.

Oil Price Humbug

Once again, to my utter dismay, the Comrades are right. Albeit unknowingly. Petro-products in India are highly subsidised. Starting with this assumption all kinds of nonsense is being bandied about by all kinds of people ranging from BBC and CNN to the Bush-Condi comedy circus to the international financial press giants to the Indian pink sheets and the Indian business channels and their invited experts - people who should know better. Even the Government press releases justifying the recent price increases start here. This assumption which leads to calls for letting market forces operate freely and cries for curbing consumption is simply untrue. Petrol, to take the prime example, sells in the U.S. currently around $ 4 per gallon or Rs. 42 per litre. In India the average price at the selling point is Rs. 55 per litre or $ 5.20 per gallon. What then is going on? Complete distortion of the cost structure by ham-handed taxation at multiple points combined with inefficient procurement-conversion-delivery chain management. American oil companies deliver petrol, or gas as they call it, to the consumers at 30% less and make enormous profits. In India a few politicians, government economists and public sector honchos know better. As a result the consumer pays a higher price and the oil companies make losses! Finance ministers, at the Centre and States, happily take credit for the bonanza delivered by ad valorem duties and taxes but talk of revenue sacrifice when asked to reduce the same. Utter nonsense. Whether petrol in India should be more expensive than it is in the U.S., and if so how much more, is a separate question but let us face facts and stop trying to fool ourselves. There is no subsidy.

The Undead Deal

I am constantly surprised by seemingly intelligent people, who have major media platforms to vent their opinions, proclaiming two impossible things every now and then. The first is that the civilian nuclear deal between India and the U.S. is dead. The second is that the U.S. has imposed this or that deadline.

People, neither of these is going to happen - ever. No deadline is relevant because India is too big now for the U.S. to say that it is no longer open to discuss civilian nuclear co-operation. At the same time India's galloping energy needs will keep it perpetually looking at nuclear power to supplement hydro and fossil fuels. Solar energy and wind energy are not expected by any serious energy planner to play a significant role any time soon.

What can and should happen is that at some point of time in the future, how near or distant I have no way of estimating, a more confident and assertive India should negotiate with a more realistic and less belligerent America a deal which both can live with in perpetuity. The half life of such co-operation, as of the fuel it deals with, will have to be virtually infinite with no scope for either party to blackmail the other to do its bidding either commercially or geo-politically.

The Indian public and the American public already know this. The politicians will learn. The Hyde act can not be by-passed but it can and will have to be repealed.

Postscript: As we all know the deal is now fait accompli. 

Next  The Nuclear Murders
First  The Nuclear Mess