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Getting clearances for projects is too time consuming
Atul Punj, chairman, Punj Lloyd, said in an interview that starting a large number of infrastructure projects is not an adequate solution unless problems that arise during implementation are resolved quickly. Edited excerpts:
We all know the numbers about building India but we also know that it has always been one step forward and two steps back. How would you place things right now?
I think right now we are trying to struggle to come back from the two steps back. You have challenges which are resulting in a huge problem in terms land acquisition, coal linkages, environmental clearances. If you just look at the sheer number of projects that have been given licences and what stage they have reached, it’s a abysmal performance.
You have a lot of gas-fired power plants, for example, where the power plants are up and pipelines are built to connect them with the gas supplies, but there’s no gas. So, you have an idling capacity on the gas side as well. So, almost everywhere you look, our ability to time to market for the particular project is way behind the rest of the world’s standards.
I was in Sri Lanka last week to put up a power plant in Sri Lanka. Sri Lanka is just stones throw away from the southern tip and simply the clearances will be that much faster. So, we find that there are too many agencies that are involved whether it is on the highway side, whether it is on the power side, whether it is on the port side or you want to build a shipyard, it is just too time-consuming.
And everyday you find that there is some new change in the regulation and there’s no real transparency on what exactly you need to do and where you need to do, barring some states which have taken the ownership of really building out infrastructure. We all know which ones they are, which are different from the rest of the country but overall we have gone two steps back if not three.
Over the last two years, we have all spoken about a policy paralysis and infrastructure not really getting the leg up it needed. A lot of infrastructure companies, including yours have faced the flak for it. This year with all the noise and the hope of progress, has there been any change on the ground.
Awarding contracts is not solving the problem. People tend to see that the number of contracts or the kilometres on highways is showing that there is a major movement in the sector. The point is are you really geared up as a nation that says that all agencies are now committed to this happening? Are you able to deliver on time? Are you willing to take the politically unpopular step of dealing with local issues, whether it is moving a small temple or a small mosque or some other place which is significant to the locals? Are you willing to re-route the highway around those obstacles? Are the tree-cutting permissions coming from the right agencies at the right time?
The disputes that have arisen over all contracts globally, whether it be a difference of opinion between the owner, the contractor and the engineer. Now everywhere else in the world they have sorted out the dispute resolution in a seamless manner that within three to six months after your project is done, you have come to a conclusion. In India it’s a minimum of five to seven year wait.
But this has always been a problem. Has it been exaggerated because of other issues over the last two years?
It has been exaggerated because of the sheer number of projects that have been floated out have resulted in that many more litigations which means the system which is already constrained to resolve these disputes is hugely overburdened.
The B.K. Chaturvedi report has been on the table, everybody knows what needs to be done but everything seems to be done in little bits and pieces, it’s not taken up in a holistic manner that.
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