Infrastructure and Economic Development
The Planning Commission has set an ambitious double-digit national economic growth rate during the 11th Five-Year Plan. How do we go about accomplishing this difficult task? There is now a general consensus that the answer lies primarily in the creation of high-quality infrastructure: physical, social and economic. How the Interstate Highway System launched by the Eisenhower administration in the 1950s helped create a more mobile and much wealthier America is now legendary. Back home in India, we have the classic case of the Grand Trunk Road, built by the 16th century ruler, Sher Shah Suri, to promote trade. A 2,000 km stretch of the Grand Trunk, linking six Indian states, still acts as the backbone of commercial prosperity across India.
Several studies carried out in the past have shown that the expansion of rural infrastructure helps economic growth and leads to a reduction in poverty. According to the Rural Infrastructure Report, recently published by the NCAER, the development of rural infrastructure has a five-fold impact on the economy. Good infrastructure creates better access to employment and provides more income opportunities;
increases production efficiency; gives access to previously inaccessible goods and services; helps citizens to save time and therefore to become more involved in productive activities; and
improves the health and physical condition of the rural population.
Infrastructure-Centric Governance
Economic liberalization heralded the beginning of a new era of infrastructure-focused governance in India. The government is already implementing a transparent and independent regulatory framework for the infrastructure sector, based on international best practices. A committee, chaired by the Prime Minister, has been set up to closely monitor progress on all key infrastructure projects on a quarterly basis. A Viability Gap Grant Scheme has been instituted to support infrastructure projects (such as power, highways, ports, airports, railways, water supply, and urban transportation) that, despite being economically viable, are financially unfeasible. A Special Purpose Vehicle (SPV), called India Infrastructure Finance Corporation Limited (IIFC), has been established to lend funds with longer maturities for commercially viable projects in infrastructure sectors, including projects that become viable after receiving financing. of the government’s viability deficit. Comprehensive model concession agreement (MCA) frameworks for public-private partnerships (PPPs) are in place or being developed for the highway, seaport and airport sectors. These MCAs, based on internationally accepted principles and best practices, disaggregate risks and costs, and allocate them to the party best suited to manage them. The movement of containers by rail, hitherto monopolized by the public sector entity, CONCOR, has been opened up to competition, making private sector entities eligible to own and operate container trains.
Today, sectoral policies at the national, regional and local levels are being developed around fundamental principles, such as: (1) efficient use of existing assets and optimal allocation of additional resources, (2) payment for services, (3 ) equity contractual structures, (4) transparent procurement process, (5) fair regulatory framework, (6) favorable institutional infrastructure, and (7) sustainable incentives and concessions.
New demands in infrastructure management
As innovative concepts, frameworks and methodologies are developed, at national, regional and local levels, especially in critical facets of infrastructure management such as financing, contracting and regulation, an infrastructure manager today needs to have a variety of skills:
Marketing, business development and financial management skills to mobilize and manage project resources.
Technical and engineering skills to determine the technological soundness of the project.
Skills in Participatory Learning and Action (PLA), Information, Education and Communication (IEC) and Strategic Environmental Assessment (SEA) to assess the specific social, economic and environmental impact of the project location.
Organizational skills and capacity building to ensure the sustainability of the project.
Need for holistic training
With a huge investment requirement in the order of Rs 14.5 trillion ($320 billion) over the next six years, and a host of new investor-friendly policies in the offing, the infrastructure is poised to become the most “successor” sector. of the Indian economy. The immediate requirement of the Indian economy is a holistically trained and domain-ready group of infrastructure managers, who have the ability and courage to (a) convert the huge investments into quality infrastructure facilities; (b) improve the configuration of the existing infrastructure; and (c) maintain high infrastructure service levels by adopting best management practices. Whether it be physical, social, economic or environmental infrastructure, the demand for such holistically trained managers will be unprecedented.
A trail jacket
In response to this pressing need for domain-ready managers, the first comprehensive Graduate Diploma Program in Infrastructure Management (PGDIM) was launched in the country in August 2005. The programme, offered by the prestigious Visvesvaraya Technological University (VTU) of Karnataka, is being delivered by the Management School for Infrastructure Strategy and Development – India (MINDS), in Bangalore. MINDS is a division of the Center for Symbiosis of Technology, Environment & Management (STEM), a professional research group with nearly two decades of experience in development research, consulting and training.
The PGDIM is a one-year, full-time program for graduates in all engineering disciplines and postgraduates in other disciplines. The curriculum is designed with a holistic approach to infrastructure management covering project management; Marketing; Contract management; Infrastructure Financing; ICT applications; GIS applications; Strategic Environmental Assessment (SEA); legal and regulatory environment; and emerging paradigms. Program participants also work on real projects implemented by renowned infrastructure organizations and gain hands-on professional experience.
Based on the encouraging experience of running the unique PGDIM Program, VTU is starting a new format of two-in-one PG Program in Infrastructure Management starting in the 2007-08 academic year. Highly modular in structure, this innovative program offers a ‘Dual Qualification Option’ whereby a student is awarded a Postgraduate Diploma in Infrastructure Management (PGDIM) upon successful completion of the first year and also an MBA in Infrastructure Management, after the second year. . An exceptional feature of the PG Dual Option Program is that it is a highly modular arrangement in which a student must decide only in the middle or even at the end of the year-long PGDIM whether to proceed to the second year of the Master of Business Administration.
The second year (MBA level) comprises two semesters and includes an advanced internship in the form of extended project assignments. An additional feature of the MBA is that it also provides specialization in areas such as Urban Governance and Management, IT Infrastructure Management, Communication and Transportation, Power and Energy, Health, Education, Water and Sanitation, and PPP.
Both the PG Diploma and the MBA Degree are awarded by the VTU.
Good corporate response
Students in the first batch gained practical experience through Corporate Learning and Exposure (CEL) internships at leading public/private infrastructure organizations including GMR Hyderabad International Airport Ltd (GHIAL), Hubli-Dharwar Municipal Corporation (HDMC), IDECK, Kristal Group, TCE Consulting Engineers Ltd and UN Habitat. The study topics included: (i) Financial Risk Analysis in the context of airport infrastructure management; (ii) Installation of Effective Systems for Attention to Public Complaints and Emergency Response (PGRS and ERS) in the Municipal Environment; (iii) Urban Planning and Renewal; (iv) Planning and Programming for Infrastructure Development; (v) Commercial Aspects of the Energy Business Consulting; (vi) Evaluation of the UN-Habitat Water Program for Asian Cities; (vii) Environmental Impact Assessment for the Installation of Small Hydroelectric Power Plants. Naturally, the first batch of PGDIM was well received by the industry and received a 100% final placement offer with attractive packages comparable to any emerging sector. Employers include DLF Group, IL&FS and Karnataka Infrastructure Development Corporation (IDECK).