Infrastructural development is the easiest way to spot the development of a country. In 2009, Goldman Sachs estimated India needed to invest $1.7 trillion over the following ten years. But infrastructure projects worth $110 billion have remained stalled for various reasons. This, in many cases, has translated to a lack of investor confidence.
The Flash Report by the ministry of statistics and programme implementation (MoSPI-Dec 2014) revealed that out of 738 central sector infrastructure projects costing R977,589 crore, as many as 315 are delayed, with the anticipated completion cost being R1,184,766 crore. These delays reflect overall cost overrun of R207,177 crore (21.20% of original cost).
The budget of 2015 saw a big push for infrastructure with a hefty R70,000 crore increase in investment to meet the deficit target accumulated over the years. The Centre is ambitious, but a constant monitoring of the current situation is necessary to chalk a practical and achievable plan.
A report by PMI-KPMG revealed that ineffective planning and monitoring is the root cause of project delays and cost overrun. This suggests that the infrastructure sector lacks the practice of project management, and qualified project managers.
Project management is the process of setting up monitoring offices, risk assessment, streamlining processes, skills and experience to achieve the project objectives. In order to bridge the gap between strategy and execution, it is vital for the government to identify the crucial issues and create an environment for projects to succeed.
Project Management Institute (PMI) along with Federation of Indian Chambers of Commerce and Industry (Ficci) have identified the top three critical issues, and submitted a report to the government for programmes like Make in India and infrastructure development to succeed. They are:
* Creation of a framework and implementation plan for continuous improvement in the quality of stakeholder engagement and risk management in large projects;
* The need for nodal agencies to monitor project execution and provide support for on-time completion, especially to intervene when projects run into problems and to pick up signals for proactive action in future;
* Training and tools for enhancing organisational project management capabilities, especially in government for project monitoring and execution.
The dynamic and complex nature of massive government programmes calls for excellence in project management. In addition, ‘Realisation’ is another such process which involves analysing factors affecting project delivery. It enables organisations to capture hard facts, providing them an opportunity to increase the rate of project success. Thus, incorporating project management will help achieve the goal of creating better infrastructure.
By Raj Kalady
The author is managing director, Project Management Institute