Slicing Through the Red Tape

Delhi is a city of contrasts.

Two guards open the tall gates of a farmhouse in the south of the city, revealing long green lawns and a swimming pool that wraps around the 5-bedroom mansion. A few kilometers to the east, in a plot of the same size, a slum slopes down from a hill, kuchha huts held off-kilter, each jhuggi filled with three, four, or five of a family. It’s a vibrant patchwork of haves and have nots, crossing paths everywhere and all the time. It can be disorienting to view it too closely—so much money here, yet just next door, none at all.

This is the crux of my interest in the Kathputli Colony slum rehabilitation project. In the Public-Private Partnership (PPP) model, the state outsources its housing projects to the private sector, which is enticed by the promise of a percentage of the total plot of land. In the case of Kathputli, this model has produced the paragon of Delhi’s disparities: just beside the high-rise buildings that will house Kathputli’s slum dwellers, the private developer Raheja Inc. will construct the Raheja Phoenix, a luxury skyscraper equipped with helipad and skyclub. Kathputli, as result, will become a perfect microcosm to Delhi’s macro, an experiment in inequality.

 

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Another day’s work:

 

Walking past the Select City Walk Mall—Delhi’s most extravagant, most Western shopping mall—I find the District Centre, Rectangle One. It’s a building made of glass and stone, well air conditioned on the inside. For four floors upwards, it’s all offices: developers, manufacturers, consultants; a handful of men in suits move quickly with briefcases through the halls, leather shoes tapping against linoleum floors. Outside each office is a security guard in a light blue uniform, standing patiently against the metal guardrails.

At the front desk of Raheja’s office, a woman greets me and asks if I have an appointment. I explain the purpose of my visit and she tells me to have a seat. I ask her if she has a pen so I can jot down some notes while I wait. She doesn’t—only computers around here.

The waiting area: four modernist leather couches, forming a long rectangle, with a small glass coffee table offering choice selections of magazines, arranged so the title of each magazine is made visible. Along the wall, there is a four-squared flat-screen TV, each square showing off different elements of Raheja Inc. There is a clip of a galloping horse. On another screen, a beautiful woman walks through a new house and talks silently to the camera. On yet another, a CGI sports car drives through a CGI model of a Raheja development, parking in front of a giant luxury tower before the camera zooms up to show the infinity pool falling off the penthouse. There’s a lot of smooth jazz, and someone brings me a glass of water on a tray.

 It’s very hard not to be seduced by India’s private sector. Sinking into the leather chair, I breath a heavy sigh thinking about all those hours speed-walking through the Delhi Development Authority’s (DDA) damp and dark and humid halls. Just being inside of Raheja’s offices gives the impression of efficiency: everything smells good and everyone dresses well and the windows are made of frosted glass. There’s something about money.

 And that was the idea behind the PPP. For many years now, the public-private model has been promoted heavily by organizations like the World Bank, suggesting that private companies can act as a productive resource to expand the capacity of the state. No longer do developing governments have to use up their own bandwidth and bank account; enlist the private sector, and the profit principle will guide us there. I don’t mean to say this cynically, or with some conspiratorial notion of neoliberalism that is often portrayed by leftists in the Global South. I think that development is an urgent enterprise, and that PPP—if it can be done equitably, if it can be done to serve the poor rather than to extend the rule of the rich over them—might very well be a productive tool of the Indian state.

So, here we find another guiding research question: How do state projects change in the PPP model? Can the private sector live up to its promise of efficiency? And if so, at what cost?

 

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 To cut straight to the point, here’s an interesting and important finding in my research thus far:

 Whenever I interview bureaucrats, I always ask some form of: how do things get done at the DDA—how does a project start, how does it move along, how does the DDA accomplish its goals. And the answer has been the same across the board. Things get done when the guy at the top comes into town and says, get it done.

 It is an interesting finding for several reasons. For one, it suggests something very important about the organization of the DDA that I have discovered in my research: operations are extremely top down. If you look at an organizational chart of the DDA, for example, this much is evident (http://dda.org.in/about_us/org_chart.htm). It is a vertical hierarchy, and my interview data has suggested that there is, in fact, little coordination between departments horizontally. More than that: while Commissioners can speak to other Department Commissioners, Deputy Directors and downward are not supposed to discuss their work. People receive their commands from above, and perform the acts that are required. In a recent interview, a former DDA commissioner told me that only “about 2 or 3 percent of the organization can be described as self-starters.” There’s just no incentive, no motivation. This is, of course, extremely important to my initial questions posed in my first post (!!), helping me to understand the challenges faced by Indian bureaucracy in general. But it is also very interesting because it is just the opposite notion of bureaucracy that we have in the West. As Weber would have it, bureaucracy means self-functioning systems—Just Press Play. The DDA provides a very different model of bureaucracy, one that is highly dependent on constant direction from the top.

 Even more, though, this finding is interesting because it poses a very important question to the private sector: if the activation of DDA’s chain of command is the most efficient route to developmental progress, Why has the DDA suddenly shifted toward the private sector? What is the private sector offering that the DDA cannot do themselves?

 

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The story of the Delhi Development Authority is in many ways the story of Delhi as a city.

 Back in 1947, Prime Minister Jawaharlal Nehru looked at his new capital with distress. With hundreds of thousands of refugees pouring into Delhi from the war-torn partition regions, slums began to prop out in every corner of the city to house this swelling population. If Delhi were to be the showpiece of the country, Nehru though, the government would have to invest heavily in organizing, arranging, and revitalizing the capital.

 And so, in 1957, the Delhi Development Authority was created, and set to work making Delhi the planned paradise of Nehru’s dreams. Within five years, the DDA had drafted its first Master Plan, a grand lay out of the city that sought to house the poor, beautify the parks, and develop the transportation of the capital.

 This was the task of the DDA for many years—“custodians of the city,” as one bureaucrat described it. They were the visionaries, the ones who guided the city toward its socialist ends. Remember: India is—constitutionally—a Socialist country; and Nehru was eager to use Delhi to make this point. If dams and factories were to become India’s new temples, Delhi would be the Vatican.

 And then, in the early 1990s, Indian development began to make a major shift. As the country grew increasingly frustrated with the snail’s pace of Nehru’s “mixed method” of development—some state-owned enterprises here, some private enterprises there—the government began to open India up to all sorts of liberal reform. Markets opened, profits soared, and the country began to post insanely high growth rates of 6, 7, and 8 percent.

 The DDA, the story goes, followed suit. In the early 1990s, under the direction of the DDA’s Chairman, several committees were formed to assess the state of the organization and to reevaluate its goals. The findings of these committees all pointed to a new role for the DDA—less as visionaries or custodians, and more as “facilitators,” helping private firms to develop the city for themselves. The DDA abandoned the monopoly it once held over property in the city, and it began to sell off sections of land to the private sector. Select City Walk Mall (as above) was just on the horizon.

 So, on the one hand, the political economy of the transition is relatively simple. Not much different than the Big Business lobbies in the states: rich people close to politicians can have a very persuasive influence on the direction of development in any country. They play golf together; they send their children to the same American university. That the DDA, given its highly vertical structure, made these shifts in concert with the rest of the political institutions in India is certainly interesting (interesting, for example, because the organization’s view of itself has hardly shifted at all. Almost everyone at the DDA has told me the same thing: this is the same agency that it was 60 years ago. Our mission has not changed, and our means haven’t changed. I think it is fascinating to think about how the sense of mission diffuses through the different levels of an organization, or the cultural disjunctures between the executive level and street level employees) but it is not all together surprising.

 Nonetheless, that still leaves us with the most important question of all: Is the private sector really more efficient? Are the promises of liberalization holding up?

 

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 My answer so far is: aaaaaactually not really. Or, not axiomatically. Interviews are more and more indicating to me that while the mythos of the PPP model suggests increased efficiency, the ability for the private sector to perform is highly dependent on the particular institutional configuration in a developmental regime.

 In the case of the DDA, this configuration is mind-bogglingly complex.

 First, we have the intra-organizational component. Looking again to the organization chart, we see that the DDA is a very diverse and very large agency, both vertically and horizontally. Vertically, the Commissioner has to communicate with his Directors, and then the Directors to their Deputy Directors, and then onward, down the chain, all of it communicated (remember!) in folders and folders of files. Horizontally, the organization has so many different departments: the Planners have to draw up their plans, the Land Management people conduct surveys, the Building people have to approve the plans, the Engineers have to implement them, and onward. It is an incredibly impressive tale of cooperation and coordination, and extremely important for me in this project to describe the challenges of the developmental state.

 Second, we have the inter-organizational component. For any given project, there are necessary approvals from the Airport Authority, the Fire Commission, the Delhi Urban Arts Commission (this particular agency going well beyond traditional “guidelines;” there purpose is, instead, to make sure that the project fits aesthetically with the city overall, a capricious and protean aim, at best); in addition, service infrastructure has to be solicited from the Delhi Jal Board for water, a different agency for electricity, and another one for sewage. The Delhi Urban Shelter Improvement Board has guidelines for surveys. The Municipal Corporation of Delhi has its own say; and the New Delhi Municipal Council (yes, a separate body), as well.

 Third, we have the extra-governmental circuits. Resident Welfare Associations (RWAs) can petition against a project, taking the agency to court; slum-dwellers can mobilize their politicians to threaten the DDA with protests. And on top of that, Non-Governmental Organizations (NGOs) often take on the role of a loudspeaker for bottom-up resistance, preventing the successful progression of state projects by mobilizing their resources to disrupt survey processes or refusing to move out of the settlement when the DDA demands it.

 

So, how do these circuits shift with a private developer?

 Several bureaucrats have told me that the PPP model does little to ameliorate this coordination nightmare. In fact, the DDA is excited by the Kathputli PPP for purely selfish reason—it just wants to get the property off of its back. These projects (as described above) can involve so much conflict, and so much bad press for the DDA, that they are perfectly willing to give it up to the private sector.

 Another reason, though, is that perhaps the private agency is, in fact, better able to navigate the problems of public agencies. One engineer told me in a recent interview that PPP is good because private developers can do things that public ones can’t. When slum-dwelling communities refuse to leave their jhuggis, for example, a private developer can pay off the slum dwellers to leave. Public officials have instead to play by their strict ethical guidelines.

 At the same time, it is also possible that—for better or for worse—the PPP model blocks the political circuits that exist for such bottom-up resistance. In the case of a public agency, there is a certain (albeit small) element of accountability toward the poor. Insofar as India remains a democracy, and vote banks are very important to politicians, then there is room for a great deal of political influence in the DDA. The head of the DDA, after all, is the Lieutenant-Governor of Delhi, a very political figure, with an allegiance to the Congress Party of India. Whenever their platform shifts, the DDA is subject to a shift, as well. Given the crucial role of the DDA in governing Delhi—drawing up its Master Plans, developing its land, housing its poor—the question of political autonomy is an important one. But we will save that for another post.

 For now, what I mean to say is that a private developer does not have to heed any of these political objections. It can simply pursue its goals and leave. Once the contract is signed, the responsibility of the developer is to make his money, not to serve a constituency.

 BUT on the other hand, my impression so far is that, despite these skipped steps, a private developer still faces a more difficult time developing in Delhi than a public agency. When we consider the complexity of Delhi’s coordination problem, private developers appear to be merely one more layer of complexity in this puzzle. More than that, they are a new player, having to form their own circuits rather than using the ones well-worn by a public agency like the DDA.

 The DDA prides itself on being “the master” bureaucracy—it has all of the infrastructure to do these projects in-house. And to make the matter even baffling, PPP is really not a question of money: while the DDA had very little capital to work with early on, the skyrocketing property prices and land sales of the last few decades have made the DDA into an extremely wealthy public agency. This, of course, creates a very strange inverse feedback loop—the more capacity the state has for housing projects, the less it seems to be doing them. This counterintuitive phenomenon suggests again that PPP is guided less by real factors of efficiency than by ideological and political economic motivations for privatization.

 And there’s that other nagging thing, as well—private developers are always subject to the profit principle. This, of course, can be a major asset in a development project; with private money at stake, private developers are eager to realize their profits, pushing the project forward. Yet wherever the view of profit is obstructed, the private sector has even less incentive to pursue the project than their public counterparts, who can execute solely for the sake of execution. One of the main reasons the Kathputli project has stalled, I have been told, is because the developer just doesn’t see much of a reason to push the project forward. Perhaps the incentive structure is not appropriate for the PPP model; but it is a whole separate conversation about whether or not we should feel comfortable sweetening the deal for the private sector just so that they will have an incentive to help the poor. With a mega-bureaucracy at Delhi’s fingertips, why give away the governance of the city’s poor to the private sector?

 

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 It is overwhelmingly clear that these blog posts are largely for me. My readership (hi, mom), while slim, has most certainly not made it all the way down here.

 But still, it is very interesting stuff. Very difficult to find answers—in the thick Delhi heat, amidst many different subjective points of view—but very interesting nonetheless.

 India remains at a very crucial stage in its liberal transformation—caught between its socialist history and its increasingly capitalistic future. Insofar as we might understand the DDA as a site of this transformation, this study should provide some very interesting insight into the tensions that arise in the transformation, and the possibilities at either end.

 

Forever & ever,

 

—David Adler, New Delhi, 03/07/2013