Transforming a Postal Infrastructure the Case of India Post
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Public Disclosure Authorized Public Disclosure Authorized MAP IA 24 Gl~E Public Disclosure Authorized T@AJ4D A002 DL$~TAL OHERAJStTUJSRL 6cJEFSfATTcOi AM Public Disclosure Authorized FDkHAMflAL $LELR7GfES June 14, 2002 Transforming a Postal Infrastructure The Case of India Post List of Abbreviations ATM Automatic teller machine LAN Local area network B2B Business to business LDC Less developed countries B2C Business to consumer MMS Mail Motor Service BOO Build own operate NGO Non-governmental organization C2C Customer to customer NSB National Savings Bank CIA Central Intelligence Agency NSE National Stock Exchange DSL Direct service line OECD Organization for Economic EDI Electronic data interchange Cooperation and Development EMI e-Money issuers PIN Personal identification number EMS Express Mail Services POSB Post Office Savings Bank GDP Gross domestic product QSF Quality Service Fund GSBA Government Savings Bank Act RBI Reserve Bank of India ICT Information and communication RMS Railway Mail Service technology RPLI Rural Postal Life Insurance IFC Intemnational Finance TTP Trusted third party Corporation USPS United States Postal Service IP India Post UPS Union Postal Service IPO Initial public offering VPN Virtual private network IPOA India Post Office Act VSAT Very small aperture terminal IT Information technology WBG World Bank Group Acknowledgements This report represents the joint effort of a team of World Bank staff lead by Simon Bell, lead financial economist, South Asia Financial and Private Sector Development Division (SASFP). The World Bank team included Nagavalli Annamalai, Leora Klapper, Jurgen Lohmeyer, Ismail Radwan, Robert Schware, Sophie Sirtaine, Karma Tshiteem. Consultancy support was provided by Graeme Lee from Consignia (formerly Royal Mail, United Kingdom), Gerhard Moeller from Deustche Post and Wong Sau Ngan and Ranita Hussein (Malaysia). The report was undertaken in close collaboration with a team from India Post led by Ashok Pal Singh (Director, Savings Bank) and including A.K. Bhatnagar, (D.D. G. PO & I), Alok Pande, (Assistant Director General, Indian Postal Service), John Samuel (Additional General Manager, Business Development Directorate), and P.C. Pratihari (Assistant Director General). The report was Peer Reviewed by Gautam Bhardwaj (Invest India); Isabel Ngoc Dung Andress (CITPO); Juan Ianni (United States Postal Service), Bjorn Wellenius (Global Products Group - CITPO); Charlie Garrigues (FSD) and Esko Lintunen (OPCDF). Marilou Uy (SASFP) was the Sector Director responsible for this work and Mieko Nishimizu was the Vice President (South Asia Region). Funding support to make this report possible was kindly provided by the Financial Sector Network. This report is designed to encourage an exchange of ideas on the use of the postal infrastructure in a rapidly changing environment. Transforming a Postal Infratructure The Case of India Post INDIA THE USE OF TECHNOLOGY FOR THE DELIVERY OF INFORMATION AND FINANCL41 SERVICES THROUGH THE POST OFFICE Table of Contents EXECUTIVE SUMARY ..................... II INTRODUCTION .................... 1 OBJECr S ............................................................................................................................ CEAPTER ONE .................................................................................................................. 2 THE EVOLVING ROLE OF POST OFFICES IN OECD COUNTRIES ..................... 2 WORLDWIDE RENDS ..................................................................... 2 SERVICES OFFERED BY POST OFFICES ..................................................................... 2 An overview offinancial and otherpostal services ...................................................................... 3 DEMAND FOR POSTAL SERVICES ..................................................................... 6 Composition ofmail ...................................................................... 6 Demandforpostal transportationservices ...................................................................... 8 Demandforfinancialand otherpostalservices . .....................................................................8 MARKET REFORM AND LIBERALIZATION ..................................................................... 9 TECHNOLOGICAL CHANGE ........................................................ 10 E-Commerce ........................................................ I I E-Government ......................................................... 12 NEW DIRECTIONS ........................................................ 13 CHAPTER TWO ........................................................ 15 THE EVOLVING ROLE OF POST OFFICES IN DEVELOPING COUNTRIES ... 15 INTRODUCrION ........................................................ 15 NONTRADITIONAL SERVICES OFFERED BY POSTAL AGENCIES .............................................. 15 SINGAPORE AN ENABLING ENVI]ONMENT FOR NEW PRODUCTS AND SERVICES ........... ........... 16 PAKISTAN - AUTONOMY FOR SERVICE DELIVERY ....................................... 19 INDIA - ANDRA PRADESH E-GOVERNMENT INITIATIVE ........................................................ 19 Government-Citizen Interface........................................................ 20 APSWAN (Andhra Pradesh State Wide Area Network) .......................................... 20 CARD (Computer-Aided Administration of Registration Department) . ...........................................20 MPHS (Multipurpose Household Survey Project) .............................................. 21 TWI7VS (Twin Cities Network Services) ........................................................ 21 APDMS (Andhra Pradesh Development Monitoring System) ..................................... 21 FAST (Fully Automated Services of Transport) ........................................................ 21 SKIEMS (Secretariat Knowledge and Information Management System) .......................................... 22 WORLD BANK GROUP SUPPORT TO POSTAL REFORM ........................................................ 23 GeneralApproach ......................................................... 23 Transforming a Postm Infistructure The Case of India Post Algeria Telecommunications and PostalSector Reform Project 2000 ............................................. 24 MauritaniaTelecommunications and PostalSectors Reform 1999.................................................. 24 Morocco Post and the Information Technology Sector Adjustment Loan 1999 ............................... 24 Trinidadand Tobago Postal Services Reform Project 1999..................................................... 25 Argentina PostalInvestment Project 1998..................................................... 25 GuatemalaPrivate Participation in Infrastructure 1997 ..................................................... 25 FUTURE DIRECTIONS ..................................................... 26 C APTER R ........................................................................................................... 27 THE MODERNIZATION OF INDIA POST - STATUS, CHALLENGES, PERSPECTIVES ...................................................... 27 INDIA POST: AN OVEVI E...................................................... 27 Legal and regulatoryenvironment ...................................................... 27 Political objectives, vision, mission ...................................................... 28 OPERATIONAL PARAMETERS ...................................................... 28 Organizationalstructures ...................................................... 28 Management team ...................................................... 29 Staff ....................................................... 29 Mail volumes ...................................................... 30 Network; production system, technology ...................................................... 32 Revenues ...................................................... 33 Cost structures....................................................... 35 Financialdata; budgetaryprocesses and systems, investment policy . .............................................36 NEW PRODUCTS AND SERVICES . ..................................................... 36 Postal banking services...................................................... 36 New Business...................................................... 36 IWPROVING SERVICES ....................................................... 38 Pricing...................................................... 38 Productivity...................................................... 39 Quality of service ....................................................... 40 Market volumes and structures, customers, competitors ......................................... 40 CURRENT REFORM EFFORTS ...................................................... 40 Privatesector participation ...................................................... 41 LEVERAGING THE INDIAN POSTAL INFRASTRUCTURE ...................................................... 42 NEW PARTNERSHIPS AND ALLIANCES ...................................................... 43 THE CHALLENGE OF TIRANSFCORMATION .............................................. 43 RECOMMENDATIONS ...................................................... 44 Sector policy reform ...................................................... 44 Postal enterprise modernization...................................................... 46 Prioritiesand road map...................................................... 46 NEXT STEPS .....................................................