Quick quantitative estimations

Some months ago I wrote a blog post on "Testing the numbers, on the fly". Well, yesterday I was flying - literally - out of Frankfurt and saw a sign that said, "New A Plus Pier in Terminal 1 under construction". It went on to say that the pier could handle 6 million passengers a year and was 180,000 square meters in floor area.

It's interesting to know this ratio of passengers to floor area, I thought.

Then I thought, hmm... does this ratio make financial sense? So I began to guesstimate.

Let's say that real estate here is about the cost of real estate where I live. At bulk discounted rates, it might be 100 dollars per square foot, plus minus a bit. Or 1000 dollars per square meter approximately.

So the new pier is 180 million dollars in investment. 30 dollars per passenger.

For a payback period of 5 years, you need 6 dollars per passenger per year - probably taken out of retail concessions in the West. But Indian airport retail doesn't do well yet.

Well, 6 dollars is equal to Rs. 300. Then it hit me - the airport tax at Delhi airport used to be Rs. 300. And I smiled.

Of course the calculations won't be exact. But it is always fun to get close.

On Indians and projects

When asked what type of management education India needs, I often say, "Most importantly, we need to teach people how to run projects - how to break the work into significant tasks, how to assign responsibilities and set timelines, and how to report consistently on those timelines, mitigate risks etc. I don't want MBAs with bookish knowledge, I want someone who can really get stuff done. And much of it boils down to planning and executing projects."

And I have blogged about it here and here and elsewhere.

Well, this week I am in Europe, mortified as the news of the CommonWealth Games dominates newspapers and television channels here. It even comes up in business meetings.

All because of very shoddy planning. I really think that corruption is a somewhat separate issue.

Yet I also want to add this (if only to calm myself) - yes, China can put up taller buildings than India can, better buildings than India can, and can put them up in a planned way. But when it comes to software, Indian project planning is as good as you can get anywhere in the world. There are two Indias, and software is part of the new India...