Future investments depend on how we treat existing projects

Can this be the twist in UPA II’s tail and the welcome unknotting of India’s wound-up growth story? Just over a month after the Prime Minister’s Office constituted a monitoring committee in early June this year to troubleshoot stalled infrastructure projects, the Committee has managed to make substantial headway in expediting stalled projects. Entrusted with the daunting task of leading this Committee, Anil Swarup, Additional Secretary in the Cabinet Secretariat, interacts with Garima P about his role, challenges and the need for the platform he is heading.

You have cleared more than Rs 65,000 crore worth of projects in a matter of weeks. How does your Committee work to expedite projects? What do you do that the normal process doesn’t?
In view of the sensitivity and implications of infrastructure projects on the Indian economy, there was a very serious concern at various levels, and it was felt that the projects need to be expedited. When I took over, the first thing we did was to set up a web portal to make all the proceedings totally transparent. As on [18 July], 108 projects have found their way to the portal, for which details have been furnished by the ministry themselves or by private individuals.

Now, when a company or agency has a problem, its representatives can go to the website and furnish all the details, listing out the different issues they have with the various ministries and departments, and filling out the details in the columns meant for those ministries. As soon as these are submitted, the details go to the respective ministries automatically-without any intervention on anybody’s part.

So the issues rest with those ministries where the problems are. For example, if a fuel supply agreement (FSA) has to be signed and coal linkages need to be firmed up, details go to the coal ministry for action. They submit this proposal on the web portal to the sponsoring ministry, which we believe should be the one promoting that particular project. So if it’s a power project, even though it is a private sector project, the sponsoring ministry will be the Ministry of Power.

Once the ministry takes a look at these details, a final submission is done by the ministry to us, because we want them to be on board and don’t want the sponsoring ministry opposing a project. Then a unique number is assigned to that project through which it can be tracked by the Committee.

Once the issues are identified, tripartite sub-groups are formed-11 of them have been set up until now. These sub-groups comprise the sponsoring ministry, the recipient ministry where the issues are and myself. We sit and discuss the issues and attempt to find myself solutions. The sponsoring ministry also invites the entrepreneur to present his case. This process has made the information and discussion organised and fairly transparent.

The action points taken are get posted on the website immediately-I dictate out these points myself on the web-again, to make the process transparent.

With this, we have been able to appreciate one another’s problems-a major movement [forward] in terms of resolution of issues. Normally, an entrepreneur doesn’t know where to go when he has a problem and runs from pillar to post. He somehow finds a way to talk to some people, but there was no structure so far through which he could air his grievance and present his case in a structured manner. many problems can be solved by sitting around a table and discussing them. It’s not that this is the only group providing solutions. In a particular typical case of getting an environmental clearance, for example, I was told that the clearance had been given in February but the letter had not been issued. The group cannot take the credit for getting environmental clearance; nonetheless, the last push needs to be given by somebody.

What we are attempting to do is to focus on such issues, draw everyone’s attention to it and our belief is at least 30-40 per cent of the problems can be sorted out. But not getting a problem solved ultimately results in loss of investment. So initially, as the Finance Minister rightly mentioned, we are attempting to get the low-hanging fruit first, where only the last mile has to be built and rest of the work has been done. I hope this will give a lot of confidence to the industry and the investor.

With every meeting we are able to move some distance. In some cases solutions are found while in some we move in the direction of finding a solution. We are encouraged by the initial movement that has happened on the environmental clearances for power projects. There would be some issues that we cannot solve, and will be referred to the Cabinet Committee on Investments (CCI) [for resolution].

Since the inception of the committee to re-start 215 large projects worth over Rs 7 lakh crore, what has been the progress on getting these stalled projects back on track?
I am not very sure of the number of [stalled] projects since there are various lists mentioned on different platforms. Indeed, that is why I wanted a single platform that houses what we are working on. Rather than merely talking about numbers, we then deal with individual projects with specific details and issues.

I have written to all the industry associations with an idea to tell them about the new institutional mechanism through which the industry will be heard, and a genuine attempt will be made to find a resolution. I have also decided to hold meetings at state headquarters-another shift in approach towards resolution of issues. Projects are listed on the portal either ministry-wise or state-wise, so a lot of preliminary exercise will happen before the first meeting takes place and a resolution can be sought quickly.

So far, the response of the recipient ministries (where the problem lies) is extremely encouraging.

What are the main factors (domestic and external, policy- and process-related), that cause these delays, as you have now observed?
In my short tenure, I have discovered that the issues primarily relate to environmental clearance, coal supplies, land acquisition, law and order, and security. In the case of coal supplies, the CCI has already taken a landmark decision. Our job is to basically see that and ensure that the decision taken by the cabinet is implemented in letter and spirit expeditiously. We are taking up the issues with Ministries of Coal and Power, making them sit down together, work out a schedule, monitor any additional issues that may arise and sort them out.

In the case of Ministry of Environment and Forests, the issues relate to power projects, they could relate to road construction as a lot is happening in that space. So we discuss with them to see if there are any policy, process or other constraints that require to be sorted out and expedited. If we can identify where it is getting stuck and without infringing any policy or law if we can make it happen, we gain confidence and credibility.

India’s poor infrastructure, often cited by experts as a hurdle to robust economic growth, is mostly blamed on delays in approvals, which often force companies to put expansion projects on hold. What can the industry expect from the government as solutions, and in what kind of timeframe (if possible to predict)?
As head of this project monitoring group, my limited mandate is to see that the projects listed on the portal by the "sponsoring" ministry are not held up on accounts of bottlenecks, and if there are any bottlenecks to declog them.

My hope is that by doing this we should be able to convey a message to the investor that they can approach a body in case they run into any problem and that will probably help them to think more in terms of investment. Infrastructure is a major constraint in the development of an economy and infrastructure projects themselves lead to a lot of investment otherwise. My hope is that once this sort of arrangement does work they will feel more comfortable in bringing in more investment.

Implementation of infrastructure projects has also been slow due to burdensome regulations leading to implementation bottlenecks. How do you see this situation improving?
The problems are at various levels. First are the operational issues, when there is no problem with the policy but the processes need to be streamlined. Once you look at these processes, you discover specific policy gaps. Then you move up the ladder and see if the policy could be changed. But right now my focus is on operational issues, which are many. And as we are discussing these issues, some policy issues are also emerging.

For instance, in construction of a road, while excavating soil, there is a policy constraint on that which restricts excavation beyond a particular limit. So we take it up with the ministry, which then comes up with a policy allowing excavation, allowing eight to 10 projects stuck on that stretch to be de-clogged.

Have you formed a mechanism to monitor what happens after you clear a project? Do you stipulate timeframes for completion?
Although our group is called a monitoring group, we haven’t become monitors and I hope we don’t. We would like to provide solutions to problems rather than me telling [developers] what their milestones should be, or point out what needs to be done. That may change over a period of time, but right now our focus is facilitation and sitting with them. If we are not completely conversant with what the issues are, what will we monitor? We could monitor against the pre-existing timeframes, but I am not sure whether that will serve the purpose. My assumption is that if we play the role of facilitator, we will be able to understand the nuances of the issues, and maybe we will be slightly better equipped to ask more pertinent questions of those that are creating the problems. For me, it’s all learning right now.

With these delays, the gap between promise and performance has only widened. What are the biggest challenges you are facing while trying to get these delayed projects cleared?
It’s just a learning phase right now in understanding their complex issues and nuances. If we understand clearly why a problem arose, then the chances of finding solution are more rather than steamrolling and suggesting what to do. In a recent case, an aero city complex that was held up for the past two years on account of some very serious security concerns, and there was a need to find a balance between security and development. The windows that faced the airstrip were proving to be a security hazard. But if that side were closed, a large number of rooms would have become useless. We concluded and agreed that a particular quality of glass could be used. The Defence Research and Development Organisation (DRDO) has been assigned the task of determining the parameters for the glass.

If a project is stalled, new projects can’t get started because stalled projects reduce efficiency of capital usage. How do you aim to tackle this issue?
Future investments depend on how existing projects are treated. So if the existing projects are treated well and they feel comfortable, they will invest more. My job is to see that the existing projects run smoothly and not run into trouble.

As a labour expert, what would be your advice to the infrastructure industry in scaling over problems of labour?
In my previous stint, I was more into labour welfare rather than regulation, and believe that labour welfare should be an intrinsic part of any developmental process. Social security and minimum wages should essentially be given to the labour force. Their productivity improves, their satisfaction rates are higher.

IN THE FAST LANE

Anil Swarup is a 1981 UP cadre IAS officer who was picked up from the Ministry of Labour and Employment, where he was Additional Secretary, to a high-visibility, sensitive job that will potentially put India’s infrastructure story back on track. He now leads a special cell, whose task is to restart 215 stalled projects worth more than Rs 7 lakh crore. The Committee has already cleared 28 projects woth Rs 1 lakh crore (see table after interview) pending for clearances and other administrative reasons, while the private sector (especially those in the roads and power industries), on whose behest the cell was established, looks on with bated breath to witness the course correction.

TAKING OWNERSHIP
"Fortunately, the ministries have agreed with us that irrespective of the type of the project (i.e., public or private), the related ministry must own and promote it."

THE BRIDGING PROCESS

"For ministries, investment is not a priority, but is an incidental benefit. This group focuses on investment without flouting any norms, look at ways of expediting processes and not bypass them."

GROUND-UP APPROACH

"We are understanding policy through operations, giving me a chance to suggest better policy alternatives, which will help operations because ultimately policy is for a particular operation."

UNKNOT, NOT MONITOR

"We will be following up proactively [on timely implementation] only if there is a cabinet decision on a particular issue."