We never seem to walk the talk

Finance Minister P. Chidambaram, in his Budget speech, did well to draw pointed attention to the problem of ‘stalled projects’.

But the solution is not the formation of yet another ad hoc committee, when there is already a Ministry of Statistics and Programme Implementation (MSPI) to put them on the fast track and ensuring their completion in a time-bound manner.

Chidambaram, in the same speech, raised hopes of India becoming the seventh or eighth largest economy by 2017, and a $5 trillion economy and among the top five in the world by 2025.

For that to happen, all the economic players and stakeholders have to bend their energies towards completion of all the projects on hand and to be taken up in future within the time schedules and cost estimates envisaged for them. That alone would jack up the GDP by another two percentage points.

Right from the early years of Independence, however, time and cost over-runs in the construction of projects have been acting as a drag on India’s economic growth.

In fact, the country had become notorious for project delays and ‘implementation gap’.

A study undertaken some years ago by the United Nations Industrial Development Organisation (UNIDO) had estimated the total quantum of cost over-runs in stalled projects to be more than Rs 60,000 crore, or three times the original allocation for the much touted Golden Quadrilateral (the four/six-lane express highways connecting Delhi, Mumbai, Chennai and Calcutta).

CONSERVATIVE CALCULATION

As per the report of the MSPI covering the period up to July 2012, there were 198 mega central sector projects costing over Rs 1,000 crore each under implementation. Of them, 81, or nearly half, have been running behind schedule: Three by 61 months or more, 16 by 25 to 60 months, 18 by13 to 24 months, and 44 by 1 to 12 months. Among them, seven projects being executed by the Railways had been delayed by more than a decade each. The cost over-run of the 198 projects, on a cumulative basis has been put at Rs 1.02 lakh crore, or 16 per cent of the original cost.

Taking account of the tendency of officialdom to peg over-runs as low as possible, and the fact that the figures given leave out projects costing less than Rs 1000 crore each, and those being implemented by the State Governments, the total amount lost in delays is likely to be phenomenal.

In fact, one conservative calculation points to double the quantum mentioned by the MSPI.

The reasons elicited by the Ministry for cost and time over-runs from the project implementation authorities are: Delays in land acquisition and getting requisite clearances, especially relating to forests and environment; poor coordination, and sometimes conflicts, among the nodal ministries and administrative agencies; delays in award of works; lack of skilled manpower; protracted tendering process; law and order problems; and the contractors’ incapacity to mobilise adequate financial and manpower resources.

HETEROGENOUS BASKET

What the Ministry’s report has conveniently left out is its own failure to keep the ongoing projects under a stringent and frequent monitoring and review regimen.

What it has been doing so far is merely being a post office, passing on the facts and explanations gathered from the various Ministries and departments in its reports, without exercising proper and continuing scrutiny over their correctness or justifiability.

The Ministry’s Web site refers to so many things about what it is and what it does, without forgetting the heterogeneous basket of 20 points under its care extending all the way from Garibi Hatao to child and women welfare, youth development, slum improvement housing, education, health, drinking water, energy and everything else for all.

But nowhere is there an acknowledgment of its paramount responsibility to perform the roles of a storm signal, an early warning system, a trouble shooter, a problem solver and monitor-cum-coordinator in respect of projects under construction.

It is high time it assumed, or was vested with, this function and began discharging it by setting up a Watchdog Group which will have the powers and authority to call the laggards to account.

It should bring out quarterly reports on its findings.

This will obviate the need for the kind of ad hoc committee proposed by the Finance Minister, and subject the projects to close, constant and independent supervision.

Tailpiece : India’s Viceroys, Lords Dalhousie and Curzon personally used to monitor the progress of the projects under implementation in the Indian Empire: Why not Srikant Kumar Jena, Minister of State in charge of MSPI?

COMMENT NOW