It´s the little things that matter. Ignore planning and project management at your own peril.
The recommendation by the Japan International Cooperation Agency (JICA) to the Maharashtra state government to add two more lanes to the Mumbai Trans Harbour Link project is not only a simple and logical recommendation but also a necessary one. It is only logical that India´s longest sea bridge (over 20 km long), should, at the very outset, plan for accidents and emergencies by incorporating at least a couple of emergency lanes. What if, (God forbid), an accident were to occur bang in the middle of the bridge over the big blue? Would there be a way to speedily evacuate the accident victims?
The question that hasn´t been asked yet is whether the government needed an international financing agency to point it out. Shouldn´t the suggestion to incorporate emergency lanes have come from the Indian authorities themselves?
The point to note is the aspect of planning and the inference here is that planning is really not a key strength as far as infrastructure projects in India are concerned. The large numbers of stalled, delayed or abandoned infra projects bear witness to this assertion. With respect to these infra projects, what is normally characterised as implementation or execution failures can actually trace their failure to failures in planning.
´In developed markets such as the UK, other countries in Europe and the USA, project stakeholders can spend up to six months during the planning stage,´ says SM Shetty, COO, India & South Asia, Currie & Brown. ´A project goes into execution phase only
when at least 70-80 per cent of the planning is complete. In India, they jump into execution with just about 10 per cent of the overall plan. It is well near impossible for any project to be successful in this scenario,´ he adds.
Of course, in India, the completion of a project itself is a reason for labelling it a success! For instance, the original plan for the Bandra Worli sea-link estimated the cost at Rs.6.6 billion. The bridge was to be completed in five years. However, the project was subject to numerous public interest litigations, and with a five-year delay, resulted in the cost escalating to `16 billion, the additional interest cost alone accounting for Rs.7 billion. Similarly, the Mumbai metro saw a cost escalation of over 80 per cent from its initial estimated cost.
Shetty, says, ´Project costs in India can escalate beyond imagination. The escalation is not twofold or even threefold. It can be tenfold with Rs.70 billion escalating to `700 billion for instance, and that is not uncommon. However, this can be avoided by right planning. They know the route for the metro. They know the way the sea-link will take. They also know the problems they will encounter. They should have planned for it. It is okay if you start the project six months late, but once you start, you should be able to complete it at a go within the time-lines laid down´.
Raj Kalady, MD, PMI (India), highlights another aspect of planning, citing the Bangalore airport as an example. ´The Bangalore airport is a very good airport for the capacity it was intended to serve, but on the day it opened, it exceeded capacity. Within five years of its opening, it was getting upgrades. This is not an example of good planning. In contrast, look at the Delhi airport. It can last you another 60 years before you run out of space. Clearly, when the land was allotted for the airport decades back, it was done with high vision´.
Whether roads, bridges, metro, airports, ports, real estate or anything else, 50 per cent of the work is already complete if you have just made a plan, says Shetty, who advises clients on issues of project and cost management.
Take the case of Dilip Buildcon, a rapidly growing, privately held, engineering, procurement and construction (EPC) firm based in the state of Madhya Pradesh. The largest road-focussed construction firm in its state, the company has an enviable track record of completing its projects on or before their scheduled completion dates. Rohan Suryavanshi, Head-Strategy & Planning at DBL, says it´s no secret. ´The key lies in planning,´ he says. ´The planning and execution of the project are equal processes. Generally, in EPC projects, we may not get time for planning once we get the appointed date. Therefore, we set the time for planning from the date of LOA up to the date of appointment. This time-frame is usually about two and a half months´. During this planning stage, Suryavanshi and his team focus on issues relating to land acquisition and identify the critical activities of the project. The phasing of design and drawings is done for each activity as well as a complete planning of resources (construction material, plant & equipment, manpower). A phase-wise mobilisation plan of the resources is also drawn up and a cash flow programme is made to ensure timely delivery of the project.
Gurgaon-based Punj Lloyd is another firm which has commissioned a number of projects ahead of the scheduled completion time. For its Khagaria Purnea road project in the state of Bihar, the company even received an early completion bonus from the National Highways Authority of India (NHAI). Not surprisingly, Punj Lloyd is one of the few large infrastructure developers in the country who look towards their own institute - the Punj Lloyd Institute of Infrastructure Management - for engineers with multi-disciplinary skills.
However, Rajat Seksaria, VP & Business Head, Punj Lloyd Infrastructure has a different take on the issue. He believes that while the importance of theoretical and academic tools is more applicable to relatively more developed markets, the higher levels of uncertainties in India call for a slightly different skill set. ´Here, the environment is much more unstructured,´ he says. ´Therefore, an ability to gauge the sense of proportion of the different issues becomes important and knowing how to deal with each one of them quickly in the local context. These are the people who make better project managers here,´ he says.
With respect to issues such as land acquisition or right of way - issues that have scuppered many a developer´s project, Seksaria says such problems can be dealt with. ´The problem is most companies are not hands-on. One needs strong teams for liaisoning, government, corporate and community relations, a CSR focused approach and an overall strong engagement model to deal with people and resolve problems that may arise´, Seksaria says. However, he notes that with the overall growth in the industry, the importance of planning tools, MIS, monitoring systems, the implementation of IT and project management are all becoming increasingly important.
While land acquisition and right of way issues are not entirely unknown quantities, Shetty believes companies must plan for contingencies. ´For greenfield projects, depending on the project, we keep up to 10 per cent of the overall project cost as contingency. We also advise a time contingency when the drawings are not clear at the very beginning during the planning stages of the project,´ he says.
Both Kalady of PMI and Shetty of C&B are of the firm opinion that the poor track record in implementation of projects can only improve if there is more importance placed on the planning aspect. To ensure this, both of them believe that the government must make it a mandatory requirement for developers to acquire project management certification. ´If the government does not do it, then the lenders should do it. Look at the NPAs of banks in India,´ says Kalady.
Shetty adds, ´In India, I see a lesser focus on the planning aspect of the proposed project. The banks do ask for the plan but they focus on the overall project features, start and completion dates, costs and returns. There is a need to shift the focus on how each activity has been planned, what are the possible pitfalls and the mitigation measures that the developer is proposing. It´s ironic because it is these plans that are actually going to deliver the returns which the banks are so focussed on´.
Moreover, he suggests that the banks should also do their own due diligence before committing themselves. Shetty adds that Currie & Brown ensures the quality of its own staff through training and qualification with the Royal Institute of Chartered Surveyors (RICS).
Companies also opt for certification with PMI which offers the Project Management Professional (PMP) certification. (London-based RICS is a professional body that accredits professionals within the land, property and construction sectors while PMI is a US non-profit professional organisation solely for project management).
Shetty says that projects given for bidding in the US, Europe and elsewhere look for such certifications whereas in India ´they just look at the engineering qualifications and work experience. The lenders should stress on these additional qualifications,´ he emphasizes.
However, he believes that the scenario today in India us far better than it was just a decade ago. ´Ten years back, there was nothing called project management. With the multinationals coming to India and bringing their work methodologies with them, it is a far improved scenario today,´ he reflects.