DARE - Because Entrepreneurs Do

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has proposed to the government to put in place an Effective Project Implementation Regulator to monitor timely execution of projects of Navratna and Mini-Navratna public sector undertaking companies.

In a representation submitted to Ministries of Finance, Commerce & Industry and Planning Commission including the Prime Minister’s Office by ASSOCHAM President, Swati Piramal, the Chamber has made a strong case for a regulator since vast majority of PSU projects are delayed in the absence of  a watchdog.

According to Chamber estimates, cost of delays on projects implementation in the last one decade is conservatively pegged at Rs. 2 lakh crore for whole of economy and PSUs, especially those in category of Navratna and Min-Navratna slightly lesser than Rs. 1 lakh crore.

The ASSOCHAM is of the view that due to variety of reasons including frequent delays of required clearances from Public Investment Board’s (PIB), more than 60% of projects suppose to be executed by Navratna and Mini-Navratna companies are never completed as per promised schedule.

This not only inordinately delays project implementation for many years and sometimes for decade but also amount to multiple cost escalations which a growing economy like India can no longer afford.

Therefore, the time has come when collective efforts need to be put in by Prime Minister Office, Finance & Commerce Ministries including that of Planning Commission for working out  a framework for a regulator that can monitor project implementation of mega projects, said Piramal.

Experience has shown that over 50% of projects announced for implementation as well as capacity expansion in sector like road, ports, highways, power, oil & natural gas, railways and telecommunication have hardly been commissioned as per promised time frame.

This has happened since public sector companies are more often than not denied PIBs clearances due to inter-Ministerial wrangling, sometimes deliberate and often arise out to meet constitutional and legal obligations and on environmental grounds as well.  The blame for this often falls on executors but finally it is the nation that suffers.

This practice needs to be discouraged and efforts put in on war front so that the proposed regulator is put in place with sufficient teeth and constitutional powers to ensure that public sector companies are given timely clearances, water and power connections and land acquired for such projects without any delay which can be possible provided the compensation amount is adequate and that no public outcry goes against execution of projects implementation.

A case in example can be cited for inspiration from Delhi Metro Railway Corporation (DMRC) which has already set up a precedent for executing all it’s projects in phased manner much before the rolled out time period.

The proposed regulator can only be effective if it is ensured and conferred upon power that have been released for project execution for DMRC, said Piramal adding that sufficient representation should be given to public sector companies in the regulatory mechanism and senior functionaries be drawn into it from PMO, Ministries of Finance, Commerce & Industry, Planning Commission as also law & justice, besides Ministry of Urban Development.

If the government is able to set up the suggested mechanism at centre without any delay, most of the progressive states would emulate it and encourage to set up such a mechanism in the state to ensure that public sector projects in states are too implemented within the scheduled time and the rural urban divide is completely bridged by integrating infrastructure of both and inclusive growth is assured to masses.

Source: Pressreleasepoint

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