Imagine if emperor Shah Jahan had to build the Taj Mahal today. He would float a corporation — a special purpose vehicle — to undertake the task, which is what he does in a popular and funny theatrical play called Taj Mahal Ka Tender. The corporation is set up, huge spends are sanctioned, officials keep busy shuffling papers, a lot of money changes hands under the table (it is after all modern India which stands tall on the corruption index) and construction begins — again and again. Unfortunately, it is not Taj Mahal which comes up but various other buildings, including a vast housing complex for the employees of the corporation. The last scene of the play shows Shah Jahan, old and withered, still waiting to hear that construction on his dream project has begun.
The end is lost in all the fuss over the means, and that is what happens in many a government office, as we all know.
I was reminded of the play when I visited the office of the Dedicated Freight Corridor Corporation of India Ltd (DFCCL) — an SPV set up under the railway ministry about three years ago to oversee the construction of what is easily the country’s largest infrastructure project.
The original proposal was to roll out an eastern freight corridor (Bihar-Ludhiana) and a western freight corridor (Mumbai-Dadri) across 2,800 kilometres at an estimated cost of Rs 28,000 crore. About a fortnight ago, company officials told me that the cost of the corridor was now estimated to be about Rs 40,000 crore, and part of this escalation was due to the addition of another 500 kilometres to take the eastern corridor from Bihar to West Bengal (Dhankuni).
Within days, I have an updated cost estimate of the project — Rs 46,000 crore — which, I am given to understand through some insiders, is based on questionable assumptions like zero inflation in the latter years of the project. The realistic cost estimate is likely to be a whopping Rs 70,000 crore. That should bring into question the very viability of this ambitious project. Where is the money going to come from? Where is the freight traffic to support this investment? Instead of asking these basic questions, we have the railway minister announcing prefeasibility studies for additional corridors.
This cost over-run is accompanied by time over-runs too. The original project was to be completed in 2017. It could well be pushed to 2020 or beyond, given that the railway minister announced the setting up of an expert committee just a few days ago “to look into all aspects and develop a robust business plan.” Even after almost three years of incorporation, I am told the company is working with just a rudimentary business plan. If this is the state of the largest infrastructure project, I shudder to think of what the situation would be in projects of lesser importance.
The official line is of course very rosy. There is an in-principle commitment from the Japanese International Cooperation Agency or JICA for a soft loan of Rs 20,000 crore for the western freight corridor, which is considered more promising, and loans are also being negotiated for the eastern corridor, though there is no clarity on where the rest of the funding will come from. As for the other critical issue of land, the bulk of it is supposed to be acquired, and in hand within a year.
The freight corridor is incidentally one of the projects which will be monitored by the newly constituted Cabinet Committee on Infrastructure under the chairmanship of the Prime Minister. Interestingly, the Prime Minister’s Office has included the dedicated freight corridors among the projects that will be tracked by the newly set up Delivery Monitoring Unit too.
The critical issue here is not tracking however. One can monitor and track a project all the way to its ruin. We have tracked power projects for so many years, with large charts showing the month and year in which each major and minor project would be commissioned. That was all nifty paperwork given the pathetic record of actual power capacity addition.
To be effective in fast-tracking any project, there is an urgent need for accountability, and more importantly, a penalty mechanism. The PM’s Committee and its delivery monitoring unit would be much more effective if it is ensured that some heads roll each time there is a blip on the project progress chart.
