Will lights go out in India?

An internal State Department memo is surprisingly frank in its
assessment of the Y2K problems faced by India, the world’s second most
populous nation.

While the memo is unclassified, it obviously was not intended for
publication, which explains the directness of its message. The memo was
prepared by the American Embassy in New Delhi and addressed to Secretary
of State Madeleine Albright in Washington, D.C.

As is common with such documents, the authors open and close with
meaningless statements that put the best possible light on the
situation. It’s what you read in between those happy faces that makes
this memo exceptional.

The opening summary begins, for example, with assurances that “Y2K
awareness is high in India, and the country has made some real progress
in the last six months in reaching Y2K compliance, especially in the
critical sectors of banking and finance, civil aviation, and
telecommunications.”

“But,” it quickly adds, “nowhere is the Y2K process complete, and
contingency planning has barely begun. Most worrisome is the presently
largely unknown vulnerability of the ocean shipping sector and the 70
percent of the electrical power industry that is under the control of
the state electricity boards, large parts of which only now are
beginning basic inventories and assessments.”

That’s alarming news, considering that inventory and assessment is
the easiest part of the Y2K-proofing process. For entities as large as
these Indian power companies, it takes years to do the remediation work,
much less testing — and there are less than 200 days left before Y2K
hits.

This is alarming news, too, because India is a vitally important
nation on the world stage, even if this is often forgotten in
Washington. Right now its importance is readily conceded, given the
possibility of a nuclear war between India and Pakistan. For all its
poverty, India has a sizable body of highly trained and competent
technicians, some of whom have been welcomed into the U.S. to help us
with our Y2K remediation. And it is huge, with roughly a billion
people, and is expected to push past China by 2050 to become the world’s
most populous nation.

In that most critical power sector, there is a stark contrast between
the status of the private and government-run systems.

On the private side, “The National Thermal Power Corporation (NTPC),
which supplies about 25 percent of the nation’s electric power (mostly
in the north of the country), has implemented a thorough Y2K program,
which is now nearing completion in most respects,” reports the memo.

“Unfortunately,” the memo continues, “the records of the SEBs (the
State Electricity Boards), which together supply 70 percent of the
nation’s electric power, is much weaker. Some SEBs, ‘especially those
in the central and east of the country,’ according to (S.C.) Gupta
(senior technical advisor at the government’s National Informatics
Center), are only now beginning the basic inventories of equipment and
assessment of the Y2K risk. NIC worries that power failures, even in
small states, could shut down large chunks of the chronically
power-short national grid.”

Later the memo states that “while many companies in critical sectors
with sensitive equipment, large hotels, and government and diplomatic
organizations have limited backup generation capacity, this total backup
probably amounts to only 5-10 percent of India’s total electric
generating capacity nationwide.”

The memo states that “with rapidly diminishing time until the new
millennium, NIC is switching its emphasis to audits of compliance
measures already taken and contingency planning, which is almost wholly
lacking even in the most progressive Y2K sectors of the Indian economy.”

“In private industry,” says the memo, “CII (the Confederation of
Indian Industry) has found essentially three present levels of Y2K
readiness: large conglomerates like Hindustan Levers and TATA that are
reaching full compliance, smaller companies that are now working through
Y2K programs, and other smaller companies, perhaps 30 to 40 percent
of the total industrial sector (emphasis added), that have yet to
address the Y2K problem at all.”

The memo relays relatively good news about some sectors of the
economy, but notes that “the Y2K coordinators that the embassy contacted
can all talk the talk. The question is whether they can walk the walk.
The few details that most coordinators provide about the specifics of
their programs have made it impossible to make an independent assessment
of India’s likely Y2K readiness.”