Before joining government service, I could never understand when news reports at the end of a financial year informed that our Government and its agencies had failed miserably to meet its spending targets. It was impossible for me to believe that agencies could not spend money. I thought getting money was the problem and spending it the easier bit! After all, I had struggled (and continues to struggle) with the meager pocket money allocated to me all my childhood! Whatever money I got, disappeared within a week or even less. I had thought, may be they should try out people like me in Government!
Now, years later, in Government I have a different prespective on this issue. The Vijayawada Municipal Corporation (VMC) has recently been the recipient of a wind fall from the Government of India's Jawaharlal Nehru National Urban Renewal Mission (JNNURM). We have been sanctioned Projects worth $200 million (Rs 800 Cr) for providing water supply and sewerage, roads and public transport, and housing and slum development. We have been implementing this Project since the past year and I will recount some of my frustrations in this thankless exercise.
The problems span the entire process of Project execution, starting from selection of a consultant, tendering and bid process management, finding a contractor itself, to monitoring the project execution.
Our Engineering procedures are an anachronism in a market booming with construction activity. The tenders for all engineering works are prepared using the Standard Schedule of Rates (SSR), which gets revised annually in July or August. The SSR list was itself formulated decades back and so does not incorporate the costs for many of the more recent additions. Further, the rules prohibit awarding any tenders for a premium of beyond 5%. The technical qualification criterion for contractors have been formulated keeping in mind civil contractors and does not factor in the requirements for selecting contractors for modern electro-mechanical systems and Operation & Maintenance (O&M) of such systems. These guidelines and procedures were in short perfectly suited the bygone era when they were formulated.
Now, in a more liberalised era, when market determined rates are the norm and outsourcing the accepted practice, these are serious constraints and limiting factors. The SSR rates need to be either indexed to the market or need to be revised more frequently. The newer work components have to be incorporated into the SSR or maybe guidelines iussued for standardising their rates. Most importantly, the limits on tender premiums have to be scrapped. The water-tight one-size-fits-all approach to technical evaluation needs to be dispensed off, by giving more flexibility to the tendering agencies in defining such criterion.
The implementation machinery itself suffers from a severe lack of capacity. At a time when we take pride in our country being at the fore-front in the use of Information Technology and computers, we are seriously deficient in using these technologies for monitoring work implementation in Government. The execution and monitoring of these big infrastructure projects can be facilitated and considerably speeded up by using customized project management software. However these techniques and systems have yet to make any in roads into Government bureaucracy. Given the enormity of the tasks, without using them, it is impossible to execute these projects in any reasonable time period.
Forget control systems and automation, there are glaring inadequacies even in the basic processes and technologies we employ in construction. For example, we continue to do on-site preparation of the concrete mix for the majority of our civil constructions without employing technolgies like Ready Mix Concrete (RMC). Early morning today, I was inspecting a Rs 4.5 Cr or $1.1 million work involving construction of a 2.4 km long storm water drain. This work would use 12000 cubic metres of 1:3:6 cement concrete or 52800 bags of cement. Even with RMC, it would need 2000 loads, and will take atleast 2-3 months. But our Engineers are presently doing this work by on-site mixing of these 50,000 odd cement bags, and it would take some effort if this work were to get completed atleast this year. (This is something similar to an ant climbing Mt Everest!) Why then are we using RMC? My Engineers say there is just one RMC plant in the area, including in all the neighbouring districts, and that is working at full capacity and is unable to meet the requirements (as they say in finance, oversubscribed many times over!).
On the question of drains itself, the VMC has been sanctioned over 400 kms of storm water drains of various sizes. A drain work is very simple, but one of the more laborious categories of civil works. It involves laying different concrete beds, raising centering, and then filling body walls, all of which requires long curing periods. The long duration of the work, especially in thickly inhabited areas, invariably affects the quality of the work and causes enormous inconvenience to the public. Given this major constraint, I cannot imagine why a market for pre-cast structures has not developed so far. In fact, pre-cast structures have their utility not only in drains, but in most other civil works, including roads and housing. There isn't a single established pre-cast civil contractor in the entire State. We are still waiting for these developments.
One thing is for sure, these problems will be solved with time. But their resolution can be significantly expedited if the Government takes intiative and addresses them directly, rather than letting the market take its sweet time in finding solutions. Governments need to pro-actively promote and even create these markets, streamline and liberalise procedures, and incubate and spread basic technologies. Until we are able to solve these problems, we will continue to stumble along by miserably failing to achieve our spending targets.
I have only read about the Chinese economic boom. I am told they laid more than 20,000 kms of highways and more than 10,000 km of railway lines, including those supporting high speed trains, just last year alone. Infrastructure activity and its multiplier on the economy has contributed significantly towards the Chinese economic miracle. While we struggle to achieve even modest spending targets, the Chinese economic system seems to have no problems guzzling hundreds of billions of dollars. What is the difference? Maybe we can draw some useful lessons from them.
I have only outlined some of the demand side bottle-necks. There are many more such examples. There are of course the supply side constraints, involving the inability of the system of contractors and service providers, to soak up this investment and deliver services. That will be the concern for a later posting.
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