INTRODUCTION
Since 1991, the liberalisation of India has continued in an environment of traditionalism, bureaucracy, technical innovation, and mind-numbing poverty. Liberalisation involves change; in the way people live, how they work, how business is conducted.
Our business in Trett Consulting is predominantly about change. Why did the project take longer? What changes caused the extra time or cost? What caused the change? This article is about the work we carry out in India, its differences from the European business, the special features that we have to contend with, and how we have to ‘change’ to enable us to deal with traditional attitudes in the fast changing development of this huge country.
BIG IS BEAUTIFUL?
India is BIG. For example, the Trett Consulting office is in New Delhi and our driver takes 3 days on the train to visit his family in Tamil Nadu. MY site visits to Jamnagar in Gujarat on the West coast take a day using two plane trips, and so a days' site visit takes three. By train the round trip with one day on site would take 5 days.
Inevitably, major projects such as refineries and power plants are miles from anywhere - in one case 250 miles from the nearest city. A car journey to that site, a power plant in Tamil Nadu, takes 8 hours from Madras (now known as Chennai), which is a 3 hour flight from New Delhi. These facts need to be considered when looking through reams of papers to schedule the labour resources being used on a project. Where does the labour come from? What hours are worked? What skills does it possess?
The refinery project in Gujarat had 25,000 operatives on site in May 1998. 1 still do not know if that included the children! The larger adjacent refinery project had 80,000 people on site at its peak and site roads exceeded 160 miles. Large projects like this are being run by western companies but using mostly local labour. The labour is a mix of the local village labour and itinerant teams and families. The women mostly do the labouring tasks, sometimes the children play together nearby, sometimes a crèche is provided. Any large project is required to employ the local villagers, under threat of local protest action. Huge projects can be badly disrupted by local protests.
Road development in India presents a significant opportunity for contractors and financiers. India's roads extend to around 3 million kms, the vast majority little more than dirt tracks. The network needs urgent and. massive modernisation, requiring huge investment, as well as up to date construction and management methods. Latest assessments show the need for around 13,000 kms of expressways, together with the upgrading of 35,000 kms of national highways to 4-lane standard.
The World Bank and the Asian Development Bank (ADB) have decided to fund larger and longer road projects in order to attract larger and more experienced contractors to bid. India is also pushing hard for foreign contractors and investment to develop the expressway and national highway infrastructure, often using BOT principles or similar. The World Bank and ADB are instrumental in providing the procurement routes for these projects, and UNIDO has also provided excellent guidance in this form of procurement.
Whichever sector is considered, the figures, and the opportunities are BIG. The recent elections returned the BJP (Bharatiya Janata Party) as the leader of a new National Democratic Alliance coalition which has plans to concentrate on insurance, banking and other financial reforms, already begun in its previous tenure. Other areas of reform will be in infrastructure projects and public sector privatisation.
OUR EXPERIENCE IN INDIA
The Delhi office was set up in October 1996. One of our first appointments was to prepare an extension of time claim for a road contractor on an 80 km upgrade project in the state of Uttar Pradesh. The same contractor also appointed us to investigate its claim for loss and expense on a 240 km road in Rajasthan.
Both our projects were being engineered and supervised by the State Public Works Department (PWD). Because of performance issues of one engineer, the funding Bank replaced the PWD with an international consultant as the supervising engineer. By then the project was 2 years in delay. Some of the causes of delay were novel to say the least.
All trees are protected and cannot be removed without permission being granted by the appropriate Central Government Department. The necessary applications had not been made prior to the project start, and speed of response is not an option in such matters. Centre lines could not be set out, cross drainage culverts could not be constructed, and our client contractor could work on only 15 km of road after 1 year on site. Some roads I have travelled on still have the occasional tree growing in the surface. 1 am surprised that a Tata truck has not removed some of them by now ..!
Villages grow up along the road system and homes and temples exist right up to the edge of the road. These need to be moved when a road upgrade and widening is planned. None of the initial discussions with the local community had occurred by the time the work started and the contractor faced difficult, time-consuming and costly negotiations with the village elders.
There were numerous instances of design delays, some being described as a result of car or train delays in the transportation of such information to site. But all of this is our stock in trade. We set about collecting this information and imposing it on the agreed programme. Where is the agreed programme? In its absence, we recreated the programme based on progress reports and a later updated programme.
Much of the correspondence was in Hindi and had to be translated by our local staff. One of these documents was a PWD standard form for the request for extensions of time. No consideration to an EOT would be given unless this form was completed by the contractor. By completing the form, the small (Hindi) print said that the contractor agreed not to make any loss and expense claim in respect of any delay for which the EOT was subsequently granted. Remember, this project was already 2 years in delay!
Sub-base material was to be quarried at selected approved quarries in areas specified in the tender documents. During the course of the project, the Central government stopped all quarrying in certain localities for environmental reasons. A claim was made for additional transport costs for using approved quarries well outside the route of the road up to 115 kms away in one case on Indian roads a round trip of one day per load. On checking the papers, we found a passing reference to loads still being sourced from the original quarries via a subcontractor, whose wife's cousin's husband's brother was the manager. How should that be dealt with in the context of a claim already made by the contractor? If the claim is corrected, is the contractor admitting an illegal action? How does the client stand by benefiting from this act? Does the client know? Will he challenge the original claim? How should Trett Consulting deal with the matter?
THE FUTURE
The Delhi office is ideally placed to service public and private clients alike. The public clients remain steeped in traditional methods of contract and construction management. The potential inflow of international contractors and finance on major infrastructure projects will force the emergence of more modern techniques in both construction and management. The notorious overruns in time and cost will have to be reduced if the needs of the nation are to be realised.
We have gained significant experience in a short time in both publicly and privately financed projects. We have learnt much, and we like to believe so have our clients.
Tony Fletcher is Director or Trett Consulting (Singapore) Ltd with on-going responsibilities for India.