Monday, June 8, 2009

The challenge of rural electricfication

I had blogged earlier about the poor progress of electricification of villages under the Rajiv Gandhi Grameen Vydhythikaran Yojana (RGGVY). This post will seek to explore some of the practical reasons that holds back the progress of its implementation. Sometime back Financial Express carried this progress report on the RGGVY project.

The reason for the poor execution performance and time over-run is typical of the challenges facing infrastructure sector in India, especially those on the downstream side. Most of these villages are small, sparsely populated and scattered habitations, separated from each other, and located in geographically difficult terrains. Many of them are not even connected by any transport network and are located deep inside reserve forests or on mountain slopes. While the easily accessible villages have long been electrified, these remote villages have remained unelectrified.

Unlike power generation, electrification of these villages involves mainly laying distribution lines and erecting distribution transformers, besides setting up a few sub-stations. Most often these works are started without any clear and detailed execution plan and site clearances, and the problems generally get resolved during the execution. So it is natural that they come up against problems related to right of way or site clearances, variations in quantities estimated etc, all of which copme in the way of the speed of execution.

Further, by themselves, electrification of each village is a small piecemeal work, and therefore under the scheme guidelines, these works have been packaged, taking the district or operational jurisdiction as a unit. This in turn means that a small pool of larger contractors in each state wins the bid. The scattered nature of the work components and the specific nature of the work, means that the larger contractors do not get any significant economies of scale advantage from these works. Therefore the successful bidders sub-contract the work to small contractors. Many of these sub-contracts are small labour contracts, where the original contractor procures the materials and delivers them to the sub-contractor for erection. Conversely, contracting out these works in small packages becomes difficult to administer, both for progress and quality.

This example typifies the problems facing other similar infrastructure works like street roads and drains, water distribution and sewerage collection networks etc, all of which are scattered and geographically spread out works with inherent execution problems and issues related to site clearances, sub-contracting etc.

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