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Transforming Infra Sector With The Best Project Management Practices

Various infrastructure projects have been delayed or pending in India and at global level as well because the professional approach was not fully implemented, the logic and strategy was not properly formulated and the dependencies were not adequately envisioned

Photo Credit : Reuters


Infrastructure sector is considered as a key driver of economic growth but time and cost overruns threaten to limit the sector’s potential to help achieve the desired growth and ensure efficient capital expenditure. The Ministry of Statistics and Programme Implementation has recorded that as many as 330 infrastructure projects worth more than Rs 150 crore have witnessed cost overruns, primarily due to delays in clearances. The expenditure incurred on these projects till July is Rs 6,80,016.96 crore, which is 38.87 per cent of the total anticipated cost. The report attributes the time overrun to a host of issues including delay in land acquisition, forest clearance, supply of equipment, funds constraints, the Maoist incursion, legal cases and law and order situation.

Ministry of statistics and programme implementation monitors infrastructure projects worth Rs 150 crore and above. The total original cost of implementing 1,257 projects was Rs 15,76,903.56 crore and their anticipated completion cost is likely to be Rs 17,49,274.62 crore, cost overrun of Rs 1,72,371.06 crore (10.93% of the original). The MOSPI data published in March 2017 stated that of a total 1,231 projects above Rs 150 crore, nine projects were ahead of schedule, 324 were on schedule while 327 were delayed. Of these, 322 projects were in cost overrun, while 105 projects were showing both time and cost overrun, with respect to original implementation schedules. The total investment outlay of these 1,231 projects was Rs 15.59 lakh crore, which is now expected to see a cost overrun of Rs 1.71 lakh crore mainly due to delay in some major projects.
The complexity and site of infrastructure projects being undertaken in India has increased substantially during the last decade. As a result the regulatory frameworks related to infrastructure projects have also witnessed a significant transformation. Average infrastructure projects being executed in the country cost to the tune of INR 600 crore with duration of eight to ten years. Considering such large scale magnitudes these infrastructure projects require an explicit consideration of the regulatory issues during the planning stage to avoid any delays during the implementation stage.

A key concern during the project initiation and execution phase is ineffective project planning and monitoring practices and techniques being employed by owner as well as contractor organizations. The inadequate planning results in non identification of critical activities and concerns while the result of ineffective project monitoring manifests in form of delay in decision making due to lack of desirable information at the right time.

A project manager is assigned to lead the project team that is responsible for achieving the project objectives. While this is common for any of the projects, in case of infrastructure projects, the business value that is created by the project manager is what is reflected as a direct contribution to infrastructure growth. Project management tool is important for India’s growth story and the way forward is for industry and academia to work in tandem on this course to reach the country’s goal of being ranked as an economic superpower and a developed nation. Though organizations are realizing the growing need for structured project management, many are looking at short term training programs to enhance the skill sets of their project teams. However, the situation warrants a more serious approach.

India today needs the public and private sector to manage its infrastructure projects on time and within budget, which in turn will facilitate the development of other sectors. Indian Infrastructure sector needs to rise above the challenges and prepare for a stronger economy and a brighter future. Project management is that transformational tool. The industry need to embrace newer methods, adopt best practices from other sectors, build transparent and trust relationships with all the stakeholders, and employ sustainable policies for long-term benefit.

In the absence of a professional project management approach, the infrastructure projects will struggle its way for success. Various infrastructure projects have been delayed or pending in India and at global level as well because the professional approach was not fully implemented, the logic and strategy was not properly formulated and the dependencies were not adequately envisioned. On the other hand, projects which have been professionally managed were benefited with the scientific approach, risk management techniques, better contingency planning etc.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Raj Kalady

The author is Managing Director PMI India

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