Confronting Issues: 12fth Plan Infrastructure Development

Various issues need to be addressed for the realization of infrastructure development initiative by the government during 12fth plan, reports NBM&CW.

Confronting Issues: 12fth Plan Infrastructure Development


The government has targeted a mammoth capital investment of $1 trillion for the development of infrastructure sector. However, before channelizing the investment for the infrastructure development programmes, many issues involving pre-feasibility studies, finance, litigation and others will have to be addressed, in order to neutralize time and cost overruns on the part of the project implementing agencies and developers.

A major issue that primarily needs to be addressed, is linking of funds with the pace of the project developments during different phases of construction. The implementing agencies and the contractors now regret that flow of funds are not actually linked to the pace of the development of the project. According to Mr. Chakanbabu, Executive Director, Central Public Works Department, “large scale cost overruns take place as the flow of funds from the implementing agencies are not synchronized according to the project schedules. Faced with delayed release of payments, the contractors ultimately resort to arbitration, as a result the project implementing agencies finally end up in paying up the contractor, eventually raising the cost of the project.” He explains, “the basis for liking of funds to the projects is actually based on the nature of the project. A project in its initial stages may need good deal of excavation or foundation work to be carried out, requiring adequate finances but in many cases owing to inadequate funding leading to cost and time overruns occurs to the project.”

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NBM&CW February 2012

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