Remarks by Robert O. Blake, Charge d'Affaires, U.S. Embassy At the "DRUM Post Graduate Management Program Launch Event" Management Development Institute (MDI), Gurgaon

July 15, 2005

Honorable Minister P.M. Sayeed, Secretary Power R.V. Shahi, Joint Secretary Arvind Jadhav, Director Management Development Institute (MDI) Dr. Pritam Singh, selected participants for the program, distinguished guests and friends, I am very pleased to be here at the launch of the Post Graduate Energy Management Program with a specialization in Power Distribution.

I congratulate and commend the Ministry of Power (MoP) and particularly Secretary Shahi for his personal interest and leadership in conceptualizing this program. MDI’s ability to launch this program so quickly reflects well on their own management expertise and I applaud their hard work and efforts.

At the outset let me congratulate the first batch of fifty distribution executives selected for this Post Graduate program. I am told that you underwent a rigorous selection process to be here today and that you come from different states across India. One of America’s founding fathers, Benjamin Franklin, said, “An investment in knowledge pays the best interest”. The journey that you are embarking on today will lead to exciting new discoveries, challenges and opportunities in your respective careers and I’m sure will pay us all dividends in the future.

Management is considered to be a practice where art, science and craft meet. Orchestrating technology, finances and human resources to provide affordable, reliable, and high-quality electricity to all Indians is the key management challenge in the electricity sector today. This program is aimed at equipping utility professionals to meet this challenge. Gandhi-ji said, “What is true of the individual will be tomorrow true of the whole nation if individuals will but refuse to lose heart and hope.” It is our hope and expectation that individuals who graduate from this program will help lead the nation in addressing the many power sector challenges in the years ahead.

This program is very special to me. Great national partnerships are driven by people and ideas. Accordingly, this program will contribute significantly to the strengthening relations between the United States and India. The program represents a partnership among the MOP, USAID, and the MDI under the Distribution Reform, Upgrades, and Management project, or “DRUM”. This DRUM “beat” will be heard throughout the Indian power sector well into the future.

Ladies and gentlemen, next Monday, Prime Minister Manmohan Singh and President George W. Bush will be meeting for an historic summit to chart a way forward in the US-India strategic partnership. Energy cooperation will be at the forefront of talks between our two leaders.

Five working groups have been formed to explore opportunities for US-India energy cooperation. The groups will explore opportunities in oil and natural gas, power and energy efficiency, coal, new technologies and renewable energy, and last but not least civilian nuclear energy. The DRUM project will form an important component of the power and energy efficiency working group focus. USAID and the MOP are leading this working group.

With the Energy Dialogue and our expanding cooperation in other areas, these are exciting times for U.S.-India relations. I submit to you that India’s ability to successfully address today’s development challenges and opportunities will depend on her ability to reduce poverty and provide the prerequisites for economic growth. World-class infrastructure (roads, water, electricity) is needed as a foundation for development. Today, Indian citizens are becoming more vocal about improved services in both rural and urban areas. Infrastructure challenges cannot wait, yet the public sector cannot finance all of India's infrastructure needs. India must, therefore, invigorate, as a matter of priority, private sources to finance long term project development.

Ambassador David Mulford and I are strong advocates of private enterprise and free markets. This combination often solves economic growth and development challenges far more effectively than governments can. And incidentally, a good management program is an excellent way to encourage this process.

As relations between India and the United States grow stronger, it is fitting that cooperation to better connect the Indian population to reliable electrical power is also expanding. Today, less than half of Indian households have electricity, and that drops to about 20 percent in rural India.

Clearly, sustainable growth for any country depends on reliable infrastructure. That has certainly been the case in my own country. The link between access to electricity, overall economic growth and reduced poverty, is clear. India has invested huge sums in the infrastructure required to generate and transmit electric power. However, at the other end of the chain—electricity distribution—much more needs to be done. Clearly, the need to improve power distribution is essential for India to move forward.

Instituting commercial practices – such as the effective metering, billing, collection, and accounting needed to ensure the financial viability of power utilities – has not been stressed enough. State Electricity Boards are heavily dependent on government subsidies, which have reached the point where their impact on state and national fiscal operations could threaten India's overarching development objectives. Power utilities lose almost $7 billion per year. Subsidies to shore up the power sector total twice what India spends on health and half of what it spends on education. At these levels, the ability of states to invest in vital social sectors is severely limited.

The U.S. Mission to India is eager to help Indian public and private partners address these issues. We are interested in expanding access to electricity for both urban and rural consumers. The challenges may seem daunting, but India has made progress and further success is certainly possible. DRUM can help.

DRUM has three major “beats”; each of them focused on delivering consumer-level services that benefit people in rural and urban areas. The first is commercially viable and accountable distribution systems for rural electrification incorporating lessons learned from the successful U.S. rural electrification model. The second “beat” will establish pilot centers of excellence for electricity distribution that promote efficiency and conservation in the management of water and electricity resources. And the third is to provide training to 25,000 utility personnel – from linemen to senior management – in the commercial, technical, safety, and management aspects of electricity distribution.

Let me conclude by quoting John D Rockefeller. He said, “Good management consists in showing average people how to do the work of superior people.” I hope that you will always remember these words when you go back to your respective jobs. I hope that as future leaders, you will lead your teams with vision, determination, fortitude and compassion to alter the fortune of the power sector in India. The American anthropologist, Margaret Meade, said, “Never doubt that a small group of thoughtful committed people can change the world: indeed it’s the only thing that ever has!”

I once again congratulate the MOP, MDI and you, the participants, for taking this important step in enhancing our bilateral collaboration. I am optimistic that bringing power to the people will dramatically bolster economic growth and ultimately improve the lives of India’s citizens.

Dhanyavad