Projects in India Post, Unique ID drag on
Despite a Rs. 23,000-crore national e-governance plan, with 27 mission mode projects, IT firms in the country are finding the government sector a hard sell. A near complete lack of decision making in the centre coupled with negativity over the nation?s poor fiscal performance is stalling announcements of new IT projects and contracts that have already been won, say technology firms.
The most glaring instance of such a project is ?India Post?, the department of post?s (DoP?s) IT initiative to connect over 30,000 post offices across the country. The mammoth undertaking, valued at R1300 crore, was announced in 2009, but has made little progress ever since. Several unique identification (UID) projects, which were expected to have been concluded two years ago, are trudging on.
Neelam Dhawan, managing director of HP India, said, ?If you look at public sector IT buying, major decisions haven?t being happening at all. There is a degrowth in business coming from the government. We are bidding for one of the projects in the India Post transformation and it is taking an inordinately long time. Again, look at UID. That has also been left hanging. People thought it would conclude in 2010-2011.?
Other firms in the running for India Post projects are of the same view.
Infosys, for instance, says deals it had won last year are yet to get a green signal. ?Decision making is undoubtedly taking longer at the center level, and new announcements have been delayed. But we are seeing, that even contracts that have already been won are taking a long time to go through. For instance, the India Post project that we won sometime back has still not been signed,? V Balakrishnan, chief financial officer, Infosys, said.
Infosys had managed to bag the R700-750-crore financial services systems integrator contract from the DoP in October last year. It was also said to have won a R100-crore project from the department in June 2011. Typically, the firm sees government deals to be in the range of R40 crore to R700 crore.
According to experts, while the usual pitfalls of lack of trained government employees to handle projects, and lack of will are responsible for the delays to a large extent, technology projects have the unique issue of not having a cost estimation benchmark. ?There is a lack of reference point to make decision,? said Pradeep Udhas, head, IT practice, KPMG. ?Besides, for any large projects political stability is important. You start populist kind of projects during election year and later it gets stuck,? he added.
The government verticals of major tech firms are now taking solace form the fact that state administrations are still going strong.
?We have seen tenders at the central level being opened, processes going through, and then nothing come out of it. There is a little more action in the states, primarily in those with deep pockets like Maharashtra, Tamil Nadu and Gujarat,? said Vivek Sharma, GM and business head, government vertical, Wipro Infotech. Earlier this year, Wipro Infotech had rolled out a R100-crore criminal tracking system for Maharashtra Police, after implementing it in Karnataka.
