Govt spends 42% more on project delays

Review shows delay in 258 of 646 projects.

Of the 646 government projects reviewed recently by the ministry of planning and programme implementation, 258 were found to have suffered delays of 1 month to 21 years. The cost overrun in these has been found to be 40.42 per cent of the original budget.

Even in the information technology sector, only a third of all projects are completed on time and within budgets, and give the originally anticipated value, says Gregory Balestrero, global CEO of Project Management Institute (PMI).

This has spurred Pennsylvania-based PMI, which sets standards in project execution and conducts professional exams taken by thousands every year, into carrying out an audit of the Indian government's policy as well as the country's business trends.

The twin audits, to be conducted during the first six months of 2006, will be through an independent agency, ideally one close to the government and industry.

"For instance, the government's decisions related to FDI (foreign direct investment) will be part of the policy audit," said Balestrero.

According to him, most projects get delayed because of poor planning and inefficient risk management. The variables have gone up in recent times due to globalisation of processes.

That applies to not only IT companies, most of whose clients are overseas, but also to manufacturing companies. Besides, it is true of global companies too. For instance, only 18 per cent of a BMW car are manufactured in Germany. In the US, the car with the largest number of "made in USA" parts is Japanese Honda Civic.

Balestrero's prescription for remedial action is three-fold: Build project management teams (help individuals excel at it), set standards, and make project management a part of an organisation's culture.