Indian infra needs Project Management and Monitoring Consultants

NITI-Aayog should build its capacity

Union Road Transport Minister Nitin Gadkari’s recent speech in Parliament on removing of Authority Engineer (AE)’s role in National Highway Authority of India (NHAI) and Ministry of Road Transport and Highways (MoRTH) projects became viral on social media especially among infrastructure industry professionals. It is a salutary move and can make lot of positive changes in the execution of road projects.

But the speech was slightly confusing. For AE is not a designated individual or a post or a title or an assignment, but it is a firm which is called AE for supervision consultancy of the project. AE serves as “Engineer of the Authority” on a project, when the project is on the engineering, procurement and construction (EPC) model. The qualified firm will be appointed as AE by NHAI or MoRTH. Independent Engineer (IE) serves as the “Engineer of the Authority” when the project is on PPP model which is generally based on Model Concession Agreement. IEs are jointly appointed by NHAI and the concessionaire. Both of them have a vital role to play in the timely completion of the project and assuring the commercial operation date (COD). The true meaning of “authority”, is the representation of someone’s position. An AE represents NHAI at site for the effective supervision of the project in all aspects such as timely execution, quality, checking and certifying the bills. For that purpose, AEs used to have a team of professionals at each site with designations such as Team Leader (TL), Resident Engineer (RE), Deputy Resident Engineer (DRE), Highway Engineer (HE), Bridge Engineer(BE), Material Engineer (ME), Quantity Surveyor (QS) and Surveyor. Each designated professional’s CV need to be accepted by NHAI, through evaluating the weightage of CV by point systems. So practically AE is not different from project management consultancy (PMC) in India. That means changing the name from AE to PMC will not solve the real problem, rather it may increase the overhead, and result will be increase in the total project cost.

THE NDA GOVERNMENT ESTABLISHED AN EXCEPTIONAL IDEA OF REPLACING PLANNING COMMISSION WITH NITI-AAYOG WITH MANY OBJECTIVES INCLUDING THE CAPACITY BUILDING FOR IMPLEMENTATION OF PROGRAMMES AND INITIATIVES.

In developed countries four separate agencies work together to accomplish a project. PMC consultant will do the project management, EPC contractor will be responsible for the design, execution of the project, supervision consultants will assure the quality and reliability of the design and quantity survey agency will certify the bills. This model may increase the overall cost of the project. In India, we can adopt two-agency system Project Management and Monitoring Consultants (PMMC): they should work with EPC contractor and get all the necessary management support to execute the project like, utility shifting permissions, forest clearances, land acquisition issues apart from quality monitoring and certifying the bills. The appointed date for the project should be to both EPC contractor and PMMC on same document and should be jointly signed.

The team of AE/IE/PMMC need to have some skills like the knowledge of contract, technical and commercial apart from execution experience. Earlier, India used to follow BOQ (Bill of Quantity) or item rate contracts, but in new models like EPC, HAM (Hybrid Annuity Model)/ PPP model the contracts conditions and payment schedules got changed, the responsibility of contractor changed, but the fact is that most of the professionals in consultancies are not fully aware about how to implement of those changes at site. This is the main problem in today’s industry and it is deplorable that there are no adequate awareness or training programmes. This is the reason why the massive demand on such professionals are diluting the quality hence competency level of the consultant is reduced.

In 2015, the NDA government established an exceptional idea of replacing planning commission with National Institute of Transforming India (NITI-Aayog) with many objectives including the capacity building for implementation of programmes and initiatives. This NITI-Aayog has to build, to think, the capability building to supervise the infra projects in India. NHAI, MoRTH and other state governments PWDs are delegating their authorities via outsourcing to AE and IE, to cut to size their organisations and high pressure to complete the projects. It should be noted that the officials of those authorities are recruited through UPSC, Gate score or state PSC like bodies competitive exams but the professionals in AE and IE are appointed only with the experience they claim and through point system as mentioned earlier. Hence, accreditation of those consultancy firms and the certification for those officials of the consultancies are very much essential through courses and evaluation procedures. TL, RE and DRE needs contract knowledge and contracting models (EPC, HAM or PPP) knowledge apart from technical and execution knowledge of all related work. It can be done with different levels of certification while conducting a specific duration of courses with modules and assessment criteria. Apart from this the government agency is essential to certify them to be competent enough to do a supervision of specific job. The age limit for the officials also need to specified. The policy and facility for such certification has to be developed by NITI Aayog, considering fifteen years Infrastructure growth prospective of India. Those competent engineers could reform India, through quality and timely delivery while act an extended hands of authorities, with a lean organisation of the government.

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