Quick fix

A closed group discussion recently conducted by ASAPP Media in New Delhi focused on speedy solutions to give India Inc’s $1 trillion infrastructure programme a big push. Shrikant Rao, who also moderated the discussion, reports.

The second of ASAPP Media’s closed group round table discussions, ‘Quick Solutions To Bridge Project Execution Gap’ was held in New Delhi, the capital of India Inc’s yet-to-develop $1 trillion infrastructure universe. Practitioners and policymakers sat together to offer speedy remedies on how to improve India’s infrastructure sector report card. By the end of the three-hour discussion that touched upon the lack of progress in areas such as roads, power, urban infrastructure, finance and transport, everyone agreed on the need for more political iron and public involvement to drive development in the country.

The key points discussed included:

• Is there building of capacities in the various sectors or are we witness to mere planning talk?
• Reason for disputes leading to holding up of projects
• Effectiveness of arbitration as a tool to speed up already delayed projects
• Identifying deficit areas and dismantling of current blocks
• The infrastructure investment gap
• Overcoming the human capital challenge
• Technology solutions to fast forward road projects
• Renegotiation of contracts

VIEWPOINTS

Harsh Shrivastava, CEO, World Development Forum: The real challenge is to build pressure on elected representatives to ensure that there is faster imple¡mentation and completion of projects. Local aspirations must be taken into account right at the planning stage instead. There is a need to provide skill upgradation facilities for locals in the area where the project is happening. Information must be available on the economic costs of lost opportunity which in turn must be used to drive home the urgency of quick completion both to the locals and the government. Citizens’ groups should engage actively with government right from the project planning stage. Agencies should engage with locals during project execution phase as was done by the DMRC. That will build a groundswell of popular support for the project.

Ashish Wig, Chairman, Indo-American Chamber of Commerce: In the roads sector there is a need for correct data and in the case of toll collection, the concessionaire needs the support of the police and the government machinery. PPP is the way forward – we have some of the finest minds in the world.

Ajay Thomas, Registrar, London Court of Inter¡national Arbitration: We need to look at institutional mechanisms to resolve issues, select the right kind of arbitrators – those with an understanding of infra¡structure. In my view a dream team would consist of a legally qualified person with understanding of the infrastructure sector and contracts, a Chartered Accountant with number scrunching abilities and a good civil engineer. That would ensure a balanced tribunal. You need to have a two-tier dispute resolution clause where mediation can be the first option followed by arbitration or legal recourse. You also need to explore the concept of a dispute resolution board in the case of large infrastructure contracts where a panel of three experts is constituted at the start of a project to oversee the project and to nip any potential disputes in the bud. Surinder Kuda, Executive Director, Ashoka Buildcon: There is a huge need for accumulation of accurate field data – which must be owned by the client not by the consultant. We need to create an environment where engineers feel wanted. Unless you give time for planning no projects can be done. We need to plan projects for the next 20 years. There is a need for 80 per cent of land being made available – and all parties ensuring that there is forward movement.

Jyotinder Kaur, Senior Economist, HDFC Bank: We need credibility and accountability at every level, There should be stringent penalties for missed deadlines or for violation of terms of contracts. Our objective should be to ensure viable infrastructure investment. China’s growth model is premised on infrastructure investment. Let us not run after targets. It is okay to fall short of targets so long as you do it with diligence and create viable projects.

Kamal Verma, BRNL – Srei Infrastructure Finance: Accuracy and accountability in providing road sector data and resistance to paying toll are major hurdles that need to be addressed. The government must use NGOs and the media effectively in spreading the message of the benefits of projects. There should be a regulator in the Highways sector whose job would be to ensure how work can be made speedier.

SL Verma, Senior Vice President Roads, Lanco Infratech: To avoid arbitration and claims there should be standardisation.. We should look at all construcions from a future perspective. Manpower issue in the highways sector needs to be addressed – both in terms of quality and size JL Khushu, CMD, Era Infra Engineering: If we do not encourage the PPP model we will never be able to do it in future years. We need a coordinated approach and a faster rate of disposal of disputes and more clarity in the matter of shifting of utilities – specifics of such plans must be attached to the schedule. Need to increase the number of skilled people working on the projects.

Palash Srivastava, Director PPPI & Programmes, IDFC: There is a need for a programmatic approach as opposed to a project approach. We need a system which will hold all stake holders including the government accountable. While a sector regulator is fine we should also have an ombudsman approach. Public information and consultation is also very important. Finance will follow opportunities.

Avadhesh Singh, Deputy CEO, Egis India: There is need for human resource capacity building both in terms of quantity and quality. Need to churn out more engineers and increase campus recruitments. Suggestions must be invited for modification in the MCA.

TK Amla, Chief Scientist, CSIR: We need to introduce another P to PPP to include People who live around the road while making an agreement. Taking people in confidence will help sort out land acquisition related issues. We recommend employment of new materials and technologies by the contractors and the NHAI to make roads more durable. BI Singal, Director General, Institute of Urban Transport: I believe the concession agreement needs a relook. Dispute resolution should be sorted out across the table through internal discussions.

Harish Mathur, Chief Executive, ITNL: Allocation of risk amongst all stakeholders equally, to ensure clarity and correctness in DPR, pre-bid negotiations, ensuring of environment and forest clearances, review of risks such as cost escalation at all stages KV Pratap, Director, Infrastructure Division, Planning Commission: The private sector wants renegotiation of contracts citing unforeseen circumstances. We strongly feel that renegotiation is not the way to go. By doing so you create problems related to the sanctity of contracts. Once you start renegotiation all the gains of competition are lost. What is required is that we have to write better contracts and enforce them with higher performance security. The whole idea of inducting private sector investment into infrastructure projects was to allow them freedom to fail. We have to allow some projects to fail. On the must do steps I would say: prepare the projects well; do no rush projects because that would lead to delays and disputes; there should be clear allocations – do not renegotiate contracts just to reduce commercial losses of private sector on account of opportunistic bidding. Our principle is to discourage renegotiations.

Rakesh Ranjan, Advisor, Urban Development, Planning Commission: There is a concept of pre-bid discussion where all issues are discussed. Bidding is about risk. If you take a risk you have to bear it. In the matter of capacity building as far as urban development is concerned we need reform at the city level. The problem from the Government of India perspective is of governance and reforms. Year after year the Ministry has not been able to spend the amount allocated to it. I would say historically India has never been able to make a plan at a city level. Planning should be at the centre of urban strategy. We need to create conditions for reform at the level of the city. In the roads sector the issue is not about capacity building but the ability of the players to take up the projects. The old NHDP road projects were easier to handle because of higher traffic density there is not much enthusiasm now. There definitely is a decline in the investment climate of the country.