Building India with Project Management
Manage India draws on insights from experts on how public projects fare in India, the successes and the gaps, and what lies ahead.
BY ARADHANA PATI MOHAPATRA
“Government data suggest that a majority of projects—close to 60 per cent—are plagued by time and cost overruns. If current trends continue over the Eleventh and Twelfth Plan periods (2008 to 2017), McKinsey estimates suggest that India could suffer a GDP loss of US$ 200 billion (around 10 per cent of its GDP) in fiscal year 2017.” Building India—Accelerating Infrastructure Projects by McKinsey
“Despite sufficient awareness of the benefits of project management, ‘lack of client led demand in India’ and ‘lack of clarity of benefits’ stand out as the major factors influencing adoption of project management practices, even in the private sector.” Project Management Practices in India 2010 by Indicus Analytics and Ace Global, supported by PMI India
“Project management is like juggling three balls simultaneously as it involves maintaining a fine balance between delivering on time, within budget while ensuring quality. Examples of large and complex projects being delivered on all three parameters are few and far between.” Project Management in India: Insights from Six Key Sectors by the Federation of Indian Chamber of Commerce and Industry (FICCI) and PMI India
These are excerpts from a few recent reports on the state of projects in India that highlight the role of project management to improve the current situation. Projects that do not complete on time and within budget can act as a millstone around the neck pulling the country away from the projected trajectory of growth. In order to improve the success rate of projects in India a collaborative effort is needed from industry, government, professional bodies, and academia. The PMI India Project Management National Conference is a platform that brings these divergent forces together to deliberate on ways to harness the power of project management to bring positive change in project outcome across sectors.
The current state of public projects
In the fiscal year of 2010–11, the Ministry of Statistics and Program Implementation (MOSPI) revealed some disturbing data on time and cost overruns in central sector projects. The poor implementation of central sector infrastructure projects like roads, railways, and power would result in a cost overrun of `1.24 lakh crore. Out of the 600 projects of over `150 crore, the number of projects that started without approved completion dates was 73. As many as 203 of these projects recorded cost overruns, and 306 recorded time overruns. Moreover, the 306 delayed projects also recorded a cost overrun of 23 percent. The MOSPI report showed that around 50 percent of projects could not complete on time and 33 percent of central sector projects could incur costs beyond the original budget. Inefficient management of projects threaten to stymie India’s dreams of becoming an economic powerhouse.
Ms. Shagufta Inamdar, PMI India Champion Advisory Committee (CAC) member, and learning consulting head, talent transformation, Wipro Technologies, believes the major engines of economic growth are education, technological innovation, cheaper and faster communication, information availability, and globalization. “For India to be on an accelerated growth path, these engines have to be fuelled through active and abundant projects. For these various elements to come together there needs to be a stronger approach, better planning, and execution with project management acumen,” she said. According to her, the Indian economy has the potential to be a front-runner provided adequate measures are taken to improve the level of project planning and implementation.
Reasons for cost and time overruns
The MOSPI also conducted a detailed study of central government projects due to complete on March 31, 2009 to assess the reasons for time and cost overruns, and draw out the problem areas. The report data provides a panoramic view of factors that ail public sector projects. The following breakdown reveals the factors that are holding back the normal progress of projects: To get a deeper understanding of the reasons behind time and cost overruns and how project management can alleviate the problems, we spoke to experts from different industries. A common thought that emerged from our discussions is that projects in India are suffering because of inadequate project planning.
Dr. M. Ramachandran, former secretary to the Government of India, and member, PMI India Advisory Council (IAC), said, “There is no focus on implementing project planning, which in fact should take place first.” It is common in India to start a project without a plan that accounts for all facets of the project, unforeseen circumstances, and end-to-end funding.
Mr. Ketharinath Kamalanathan, PMP, member, CAC, and program manager, global delivery, Microsoft Services said, “India concentrates more on execution than planning, across the board. This misguided need to just hurry up and get going without having a set plan has consistently derailed projects and caused huge overruns in cost and time.”
The lack of trained project managers is another concern area. Individuals with technical knowledge rather than project management skills manage projects in India, thereby leading to inefficiency in management. Ms. Inamdar explained, “Indian companies give more importance to business knowledge than project management knowledge. An Indian company would not want to hire a project manager who is not technically savvy, but would be fine to hire someone who is technically strong but has no project management acumen.”
Dr. Ramachandran blamed the lack of policy and controls to regulate large public sector projects for the current situation. With his first-hand knowledge of how the public sector works, Dr. Ramachandran said, “It is important to set ground rules across central and state governments when it comes to strategizing public sector or joint venture projects. Without effective policies, the outcome is bound to be below expectations.”
A PROJECT MANAGEMENT SUCCESS STORY
In the recent past, the Delhi Metro project has stood tall as a prime example of a project management success story in the public sector. Delhi Metro is a rapid transit system that connects Delhi with its satellite towns. Built and operated by Delhi Metro Rail Corporation Ltd. (DMRC), it is a partnership between the Government of India and the Government of Delhi. Now fully operational and termed an urban miracle, Delhi Metro has proved to be a cost-effective solution for the transportation woes of India’s growing metropolises. Urban planners across the country now take the Delhi Metro project as a benchmark for successful public sector projects.
Key facts and figures
• Planning started: 1984
• DMRC set up: 1995 and senior bureaucrat E. Sreedharan appointed as managing director
• Construction started: 1998
• First section of phase I opened: 2002
• Phase I completed: 2006 on budget and almost 3 years ahead of schedule
• Phase I costs: US$ 2.3 billion
• Phase I key parameters: 189.63 km, 142 stations, daily ridership of 1.7 million, peak hour train frequency 2.5 min
Reasons for its success
• The right person, a trained and experienced project manager, was appointed.
• The management got total authority to hire people, decide on tenders, and manage funds that helped cut delays, fix accountability and build a sense of ownership.
• Detailed planning of the project, including funds required for entire project, outlined prior to commencement.
• Thorough understanding of the project plan and alignment of stakeholders’ vision, creating transparency, and a shared focus on results.
The Bina Refinery project by Engineers India Limited received the PMI India Best Project of the Year Award in 2010.
For all these drivers to turn the wheel toward a smarter way to ‘build the nation,’ the vision has to come from the top, all the way through to the project team. Mr. Kamalanathan offered an illustration of the lack of a top-down vision: a large, national bank introduced Internet banking services seven years ago. But the services have largely been underused because of inefficiencies surrounding the website. “The top executives know that the bank must modernize its services and offer customers online banking options. But this need is not expressed clearly and the vision not distilled down the ranks. Therefore, there is a major gap between envisioning project and seeing it through to fruition,” said Mr. Kamalanathan.
Market for certification is growing
PMI conducted a survey in 2010 among professionals from public and private sector organizations, academic associations, and certification bodies to find out about prevalent project management practices in India, analyze the human resource gaps in project management, and recommend action points. The Project Management Practices in India 2010 report by Indicus Analytics and Ace Global found a high level of project management maturity in capital intensive sectors, and higher prevalence in the private sector than in the public sector.
The Vidyasagar Setu is the second bridge to be built on the Hooghly River in West Bengal. The cable bridge that connects Kolkata to Hooghly was inaugurated in 1992 and is one of the first Public-Private Partnerships (PPP) projects in India.
The factors that have so far held back greater adoption of project management are the “lack of client-led demand in India” and the perceived “lack of clarity of benefits”. But slowly change is taking place even in the public sector. The report said, “Increasingly, even public sector companies have started laying emphasis on training programs and strengthening their existing project management units and professionals.” The study estimates the market for training and certification of project managers to grow from 800 million in 2009 to 1,692 million in 2015. The growth drivers will come from the infrastructure boom, client-led demand in the IT sector, procurement practices and guidelines, and projects implemented under the PPP mode.
The right approach would be to launch an all-round effort to introduce and encourage the adoption of project management across sectors and use a variety of platforms to demonstrate the resultant benefits. The PMI India Project Management National Conference that attracts professionals from different industries is one such forum to effectively take the message forward.
The way forward
Since the past decade, several public sector projects in India undertaken under the Public Private Partnership (PPP) model have shown excellent results. The PPP model utilizes the inherent strengths of two divergent forces to deliver a quality product or service. A few examples of successful PPP projects are the Delhi–Noida bridge project; Yeshaswani Co-operative Farmer’s Healthcare Scheme, a health insurance scheme for the poor in Karnakata; and the Bangalore International Airport. The Planning Commission of India has set an investment target of US$ 1.5 trillion on building infrastructure in the next 10 years. It expects 50 percent of the investments to come from the private sector. India will now look to adopting the PPP model more aggressively to achieve the steep target. “The PPP model has shown good results. The public sector has adopted the faster and more streamlined decisionmaking processes of the private sector. There is much more transparency in the public sector now. There will be increased role for project management in these projects,” said Dr. Ramachandran.
Going forward attitudes have to change even further to make public projects more successful. Added Mr. Kamalanathan, “We have seen several e-governance initiatives take off but not efficiently managed. We need to adopt technology to bolster management practices but that is not seen as a priority. People often perceive technology as a threat to government jobs. In order for e-governance to reach its potential, there needs to be a broader and more progressive way of thinking.”
Today, there is a more urgent need to train managers in project management than ever before. If India has to reach its ambitious growth targets, projects have to be completed on time and within budget. Projects have to incorporate best practices from the public and private sector to see better outcomes. Organizations need to develop a deeper understanding of project management and the capabilities that it can unlock in the workforce. “In India, people do not continue to educate themselves after becoming a project manager. Like a doctor or a lawyer, a project manager needs to update and upgrade himself/herself. Getting a credential is not the end in the game, but beginning of a new journey. It is important for project managers to be aware of the developments around them and be able to see the big picture,” said Mr. Kamalanathan. Added Ms. Inamdar, “Although things are changing now and basic project management knowledge has been embedded in higher education curriculum, India still has a long way to go.”
A collaborative effort from the government, corporates, professional bodies, and the academia to document and publicize the benefits of adopting project management will go a long way in breaking perceptions and creating a positive attitude toward it. It has been the consistent effort of PMI India to engage these various players to build constructive dialogues, share knowledge, and adopt best practices from one another. A strong India rests on a strong project management foundation.