Project management, which takes the management aspect out of design and construction, is critical to the success of any infrastructure project. This function, however, needs to be done with much precision to derive success.
Project management has rising relevance to India since the country continues to attract new business players from around the world. This global interest coupled with a population of over a billion people makes India one of the world?s most robust markets, where the key focus to drive growth has to be infrastructure development.
India spends about 6% of its GDP on infrastructure, less than several countries in Asia, and nearly half of the 11% invested by China. India intends to double infrastructure spending to $1 trillion in the five-year period starting 2012. Urban infrastructure projects?including metro services, roads and sanitation?are a large area of growth in India, with over R175,000 crore in projects under way in key cities across India.
Management of an infrastructure project, in fundamentals, is not different from any other construction project but the scale, technicalities, policies, politics and involvement of multiple stakeholders take it to a different dimension. Still the basic elemental difference lies in the percentage of population within a community/town/city/state the projects are targeted at.
A stand-alone civil project is targeted at a small percentage, whereas an infrastructure project covers a wider spectrum. An infrastructure project, in most cases, is conceived to address a current issue faced by the community or a potential issue that is forecast to come with the growth in economy or population.
Infrastructure projects are initiated to cater to the generations to come, and therefore, its longevity and flexibility to adapt to growth and technological changes are important. But a player in this space runs significant risks because project teams are left with minimal recovery options to offset the impact of schedule delays and cost overruns.
A leading research company in its study of infrastructure projects in India has reported that there are various macro and micro level risks associated with a project at various stages of implementation and these need to be addressed and mitigated with a professional approach. One measure proposed included establishing a high power group to monitor infrastructure projects with a focus on the quality of planning and engineering, contracts in use, risk management practices and performance management.
The department of economic affairs, ministry of finance, in its 2006-07 paper on India infrastructure project development fund, confirmed that some reasons for considering PPPs and FDIs in infrastructure are:
Inadequate capacity in public institutions and public officials to manage processes;
Inadequate capacity in the private sector?both in the form of developer/investor and technical manpower
This may have led to the inclusion of two Japanese municipalities in the Delhi Mumbai Industrial corridor project. The city of Kitakyushu?to provide its know-how on building a society with environmental technologies?and Yokohama?to help develop and manage water supply and sewerage systems.
This shows the criticality of project management, would require effective strategising, planning, conceptualising, designing, engineering, building and integrating at various stages.
Teams experienced in project management processes would represent and drive various stakeholders on development, such as ministries, corporations, regulatory bodies, engineering teams and specialists. Project management provides the necessary skill-set and knowledge base to manage the enormity of challenges to monitor, regulate and implement practices that promote ordered development.
The author is chairman & MD, CBRE South Asia
