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Jai Prakash Shivahare, Managing Director, Dholera Industrial City Development Company
What are the key reasons for project delay?
Every project is unique and has its own challenges which result in delays and cost overruns. Some of the typical reasons encountered are delays in land acquisition and/or land transfer for project execution; statutory approvals such as environmental compliances, forest clearances, coastal zones clearances; and project funding constraints. In addition to the typical reasons mentioned, as India starts implementing mega projects, some of the less talked about, but still quite common challenges/reasons which result in delays are:
Are you foreseeing any potential project delays for the company in the near future? How would you evaluate the same?
Costs and schedule variations up to 5 per cent is generally acceptable for large, complex programmes. This is because no engineering is ever perfect and technical issues such as poor soil conditions and weather may come up during construction, which require redesign and realignments. Sometimes, public outcry may also affect a schedule. These risks cannot be completely mitigated and have to be dealt with as a part of contingency that is set aside for each project. In Dholera, fortunately, we have had no cost overruns, but do have a 4û6 month delay due to unforeseen weather and soil conditions. We have managed to keep the cost and schedule substantially less than 5 per cent and do not intend to change our delivery strategy and approach.
As a company, would you look at realigning your strategies in 2019 to mitigate project risks?
In Dholera we have already undertaken international best practices since 2013. Building a greenfield smart city from ground up is one of the most complicated and complex endeavours. To properly manage and execute, a special purpose vehicle (SPV) was formed between the state of Gujarat and DMICDC. The SPV, Dholera Industrial City development Company (DICDL) has appointed world's most-renowned consultants as Programme Manager for New Cities (PMNC). PMNC has implemented best practices in programme management including project scheduling, cost control risk assessment, online collaboration platform, 3D design, and asset management to name a few. These tools and systems are being rigorously used to monitor, manage, and deliver Dholera Greenfield City. As an example, we are very happy to mention that in 2013, the first phase of the Dholera programme was estimated at Rs 44 billion and now, five years later, after issuing over a dozen contracts worth almost Rs 30 billion, the final estimated budget is Rs 43.50 billion, about the same as the original 2013 budget. This speaks well ofour cost control and risk management capabilities.