While embarking on greenfield airport projects on a PPP basis, the risks from high debt costs should be considered. The government may be better equipped than a private investor to handle risks in the pre-construction phase.

China achieved more success than the US and other countries in stimulating its economy because it focused on infrastructure development before the onset of the slowdown. However, China may consider converting the renminbi into an international currency to take care of its bloated reserves, says S. VENKITARAMANAN

Cost reduction Vs Cost Optimisation (6 Aug 09)

Cos optimasation takes an enterprise wide perspective of of the organsation processes rather than just funcitonal views. Cost optimsation, which focuses on customer value rather than just on cost reduction can provide a substained benefit. Cost optimsation enables more effective cash-flow management. It is like eating half-apple and saving on costs of apple, would have the effect of saving on short term cash flows but increase costs in long run on storage of uneaten half-apple. Instead it may be looked at - can we do with small apples or smaller number of apples. This perspective provides an oppurtunity to view cross functional interactions and  facilitates better identification areas of waste / improvement, while being acutely aware of cost drivers.

 

An enterprise wide appreciation of processes linkages, ability to discover cost drivers and managing costs without effecting customer value drivers, would top three strategies of cost optimsation.