Well, we have people from the government parting insights that the present requirement for infrastructure as being so many crore rupees of roads and so many crore rupees of bridges and the like; and we have a group of people informing us that the major issue today is not finance but the lack of ability of the systems to absorb these kinds of amounts. I have one question?
How in the world did they end up getting the units wrong?
To me, a hardly baked civil engineer, this issue seems important. No, no I have not yet lost my mind, I am merely trying to point to the obvious; or what I think is obvious, you can’t measure the length of the road to Mumbai from Chennai in rupees you have to invariably do it km (or cm if you have the patience that is)
So I have a few questions; sticking to the metric system how much road length has to be added this year? How many more schools are to be built in the rural areas? How much more water per household should the government plan to supply this year?
Boring? Well the point is, I want it to penetrate. The fact that someone from the side of the government comes up with the length of road in rupees is worrying to me. One, because if there is an actual requirement of a 100km of road in Hogsmeade village in Tamil Nadu and the “agency”, be it the government estimator or some international agency, comes up with a statement “Hogsmeade requires 400crs of roads” then you have a problem. Because given the fact that the occupation of the residents in Hogsmeade is magical and that they can turn anyone who come to acquire their land without twice the land value as compensation into stone, it is easy to understand if I say the final project cost will run over 700crs. Now the authority involved in construction has two ways out, one build 57km and say the work is done which is largely true as he will have built for 400crs, the projected requirement; or chicken out and say I cannot absorb the funds and I have no capacity to build.
The point is the estimated project cost and actual project cost can largely vary and that matters.
So what is the way out? Well there is always an option to hire Sherlock Homes and make him look into the matter but I fear that the application of his pristine faculties would yield an explanation quite simple and indeed trivial; ‘you either need to pay a lot more attention to your estimates or you need to look into better ways of releasing funding’ is perhaps what he would advise the government authorities. Perhaps he will go to the extent of suggesting that a central pool of funds directly accessible to the contractor upon legitimate demand is the only viable solution.
However I would reexamine the delicate yet dangerous issue of the “lack of ability to absorb”. For it is a strange acquisition but might never be an illicit one, because there may not actually be the necessary capacity to absorb the funds. Then in the case, you might accuse me of unduly accusing the government; however I would refute and enlighten you with the fact that the lack of capacity is in part the making of the government and its funding mechanism.
For with the contractors fearing the no-nonsense-negotiating mechanism of the government and with their profit margins clinging to such low values, it is perfectly justified for them to stay without work than to work and make losses. There is also this strict qualifying criterion followed by the government in the selection of “qualified” contractors which is posing quite a serious entry barrier to this field; for newer contractors that is.
All in all what I wish to say is that the government needs better methods to estimate, better methods to release funding and above all it should let the contractors and the other private parties involved to take their share of fair profits. In addition it also needs a better method to estimate the likely benefits from what they plan to build as without it there can be no real cost benefit analysis with which they can try and please the tax-payers.
Reference
1. Lecture by Mr Vikram Kapoor
2. Lecture by Mr Raj Cherubal
3. “ Infrastructure requirements too large for budget provision”, Hindu
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