Infrastructure sector considered as a key driver of economic growth

Infrastructure sector considered as a key driver of economic growth

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Accelerating infrastructure projects through project management practices

Infrastructure sector is considered as a key driver of economic growth but time and cost overruns threaten to limit the sector’s potential to help achieve the desired growth and ensure efficient capital expenditure. The Ministry of Statistics and Programme Implementation has recorded that as many as 330 infrastructure projects worth more than Rs 150 crore have witnessed cost overruns, primarily due to delays in clearances. The expenditure incurred on these projects till July is Rs 6,80,016.96 crore, which is 38.87 per cent of the total anticipated cost. The report attributes the time overrun to a host of issues including delay in land acquisition, forest clearance, supply of equipment, funds constraints, the Maoist incursion, legal cases and law and order situation.

According to a KPMG-PMI report, ineffective project planning and project monitoring is rated as the most significant risk having maximum impact on project delivery. The report highlights that the survey respondents feel that poor programme management also results in ineffective co-ordination with projects and schedule delays. Hence, it is imperative for companies to have effective project management and risk management. Lack of effective project management is considered a major cause of time and cost overrun.

With increasing number of projects being planned, there will be need for more project professionals to implement smooth execution. This prediction is further reinforced by the PMI KPMG – Study on project schedule and cost overruns – Expedite infrastructure projects survey, wherein it reveals that by 2022, Indian infrastructure sector is likely to have a shortage of around three million project professionals including project managers, civil engineers, planners, surveyors, safety professionals, etc. Shortage of project managers with the requisite skill sets has also emerged as the major cause for concern across the infrastructure sector.
Hence formulizing project management training for professionals has become imperative to counter the shortage of project professionals well equipped to handle infrastructure projects

Project management tool is important for India’s growth story and the way forward is for industry and academia to work in tandem on this course to reach the country’s goal of being ranked as an economic superpower and a developed nation. Though organizations are realizing the growing need for structured project management, many are looking at short term training programs to enhance the skill sets of their project teams. However, the situation warrants a more serious approach.

India today needs the public and private sector to manage its infrastructure projects on time and within budget, which in turn will facilitate the development of other sectors. Indian Infrastructure sector needs to rise above the challenges and prepare for a stronger economy and a brighter future. Project management is that transformational tool. The industry need to embrace newer methods, adopt best practices from other sectors, build transparent and trust relationships with all the stakeholders, and employ sustainable policies for long-term benefit.

In the absence of a professional project management approach, the infrastructure projects will struggle its way for success. Various infrastructure projects have been delayed or pending in India and at global level as well because the professional approach was not fully implemented, the logic and strategy was not properly formulated and the dependencies were not adequately envisioned. On the other hand, projects which have been professionally managed were benefited with the scientific approach, risk management techniques, better contingency planning etc.

The author is Raj Kalady, Managing Director – PMI India