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More than 80 per cent of issues pertained to the state governments
13 Mar 2020
Arun Goyal, Former Secretary to Government of India and Ex-Head of the Project Monitoring Group (PMG), had a long stint in the Group from October 2015 to February 2019.The group was tasked with fast-tracking, setting up and implementing large public, private and public-private partnership (PPP) projects by resolving a variety of issues. The group mainly dealt with projects with anticipated investment above Rs 10 billion (Rs 5 billion in case of projects with FDI). “The issues uploaded by project proponents on PMG’s portal were resolved through regular review,” says Goyal. “The review was carried through inter-ministerial subgroups and state-level meetings with respective chief secretaries or senior level-officers at state capitals or through video conference.Project proponents were also invited for these review meetings. During my three-and-a-half-year stint at PMG, more than 3,400 issues pertaining to over 720 projects were resolved under the mechanism.” Goyal shares more on solutions to avoid time and cost overruns, in conversation with SERAPHINA D’SOUZA...
“I observed that issues leading to time or cost overruns pertained to both the Centre and state governments. Central Government issues included environment, forest and wildlife clearances; eco-sensitive zone clearances; sanction of debt funds and working capital by banks or financial institutions; approval for private railways siding construction; and permission for road crossing of pipelines, transmission lines, railway lines and shifting of utilities. State government issues included land acquisition issues such as government notifications or disbursement of compensation and mutation; removalof encroachments and handing over possession of land; formulation of relief and rehabilitation plans; issue of certificate under the Forest Rights Act; tree-cutting permissions; grant of right of way (RoW) permissions; consent to establish and operate from the State Pollution Control Board; and transfer of government land.
I found that most of the issues on our portal pertained to the Central Government’s linear projects such as highways and rail lines, transmission lines and pipelines. Very few issues pertaining to the Central Government were pending on PMG’s portal at a particular time. In the Central Government, rigorous and digital monitoring mechanisms ensured issues were addressed quickly. More than 80 per cent of issues pertained to the state governments. As projects are executed on ground in different states, response varied from state to state. Some states were also slow in responding to issues owing to political reasons.
I have observed that once there is cost and time overrun in a public project, project execution tends to get further delayed. In a delayed project, decision-making involves deviations from the terms and conditions of the tender and, at times, the financial implications may be huge. In such circumstances, public-sector executives and civil servants tend be cautious and sometimes the procedures involved are also lengthy.
There is another important difference in project execution between the private sector and public sector. A public-sector employee has to follow all procedures of tendering, etc, without consideration of the time and amount already invested into the project. On the other hand, a private-sector executive is able to factor in opportunity and the cost involved because of the amount and time already invested and need not follow all procedures.
Overall, I feel there has to be a sense of urgency amongstate-level officials, particularly at the district level, to proactively resolve and expedite local-level issues. This is particularly important for linear projects because, sometimes, a long, linear project with huge investment may get stalled because of issues involved in a small patch of land.”