Q1. In the case study given identity the success or failure of the following processes – Project conception, Project definition, Project planning, Project launch & execution?

A) Project Conception

The Konkan Railway project came with concept of Roll on Roll off (RORO), where loaded trucks are directly carried by railway wagons to their destination. Truck drivers find it extremely difficult to drive loaded trucks through Ghats, undulating surfaces, narrow roads and poor road and weather conditions. This project has helped in saving of fuels, decrease in wear and tear of Lorries (trucks), relief to drivers of driving in extreme conditions, can reach faster to destination which leads to saving in travel time and money. This also helps in decongestion of roads and lowering of pollution. This concept has been beneficial for both truck operators and Konkan Railway. Therefore this project will boost to the economy of country. However this project was financial challenge to raise funds due to huge cost involve.

B) Project Definition

This is the first time in Indian history that four state governments have joined hands with the central government to begin a project of this size. Konkan Railway project is a highly viable project, financially very attractive, because it reduces distance between Bombay & Mangalore considerably. The normal haulage distance between Bombay & Mangalore was 2041 km. After the construction of this project, it would be 914 km. Also this project saves 26 hours between Bombay & Mangalore & similarly other distances. The completion of the project will benefit the public immensely, reducing journey time to Goa by 10 hours, to Cochin by over 12 hours and to Mangalore by over 26 hours. Besides driving to tourism, this railway line will contribute to a savings of at least Rs.200 crore a year in foreign exchange by reducing fuel requirements in road transport. The entire Konkan line has been built for trains travelling at speeds of 160 km an hour. The project cost, initially estimated at Rs.860 crore, has increased by over four times. The project cost has been estimated at Rs.2,780 crore, with the funding cost alone being Rs.550 crore. The funding will be a combination of equity, debt and lease financing. Konkan Railway is being constructed on a build, operate, transfer (BOT) basis. It helps build infrastructure like railways, dams or roads with public money being invested. The expected deadline of this project was taken Oct 1994 but due to adverse economic & politics situation it completed in the year 1998 at the cost of Rs.3555 cr.

C) Project Planning

As this project having a tremendous advantage, Mr. Sreedharan has decided to take approval from Planning Commission, central government and the beneficiary state Government (Maharashtra, Goa, Karnataka, and Kerala). Mr. Sreedharan appointed as Chairman of a one man committee to take up all the preliminary steps for organizing this project. The whole project was decided to complete in five years’ time. He started the project with taking the surveys, selection of final location, then administrative arrangements for the lands to be acquired, location of the bridges. All work was put in motion at the same time. They have

decided to have at least a minimal speed potential of 160 km per hour. So they have brought new technologies to cater to the high speed route. A very pragmatic and very practical approach they adopted for acquisition of land. They planned that the whole railway line would be divided into 7 zones, each zone concurrent with a revenue district, and a Chief Engineer was posted for each zone. They hired DOT lines and then established a good communication network with the headquarters of each of the Chief Engineers. They were all given FAX machines and computers to sort out communication problem. Then the most important steps was redesigning role of finance in the organization. The finance executive will have the powers to accept the advice. They only concentrate on the core areas of safety, guidance, management, payment to contractors and rest of things will do by outside agencies. The machines are imported and people are trained in Japan. The pressure gas welding was introduced. They decided to go in for optic fibre base Tele communication network. They selected contractors only from the pre-qualified list. The contractors are allowed to prepare the bill. Any bill that contractor prepares, the payment on the bill was guaranteed, so that there is no cash flow problem at all for any contractors. They set up own departmental outlets at critical areas. So any contractor can come and collect petrol or diesel that he wants.

D) Project Launch & execution

However this project would be estimated to complete 5 years’ time, ultimately took 7 years for completion. The main reason one was government’s own action. There was controversy regard to the Goa government and the work was stopped by the government. The second was finance. The Government contribution was only one-third, not even one-third but only one-fourth by way of equity. Three-fourths of the project funds had to be raised in the market. The expectations were that we could raise the money from the internal market through bonds, either tax-free bonds or taxable bonds. Unfortunately, that was a time when there was real convulsion in the capital market, following the Harshad Mehta scam. The third was unexpected adverse geological conditions in some of the tunnels. The project took off so fast that there was no time to do detailed geo-technical investigations at every tunnel site. Due to such delays in operation, even though project was successful, it has incurred financial loss during this project period.

Q2. Identify all the important stakeholders?

Following are the stakeholders which can be seen as under: -

Planning commission Prime minister Finance minister State government

Maharashtra Goa Karnataka Kerala

Chief secretary & Transport secretary of Bangalore Chief secretary & Transport secretary of Kerala Landowner Chief engineers Finance officers & Executives Engineers Functional Team Contractors Managers Investors

All the above stakeholders were important for making Konkan Rail project successful, especially contractors, landowners & consent of all higher government authorities of all four states. Without stakeholders, project wouldn’t be successful. In every project whether it is smaller or big, project stakeholder play a very important role.

Q3. The success of a project depends largely on the success of the contractor. What steps were taken to ensure the success of the contractor?

Konkan railway was one of the biggest railways project ever undertaken by Indian Government, where 760 – km railway line connecting Bombay (now Mumbai) to Mangalore was needed to be built. Government alone didn’t have the strength to complete this project on its own. They had to take help of different consultants, contractors, Govt. agencies to complete this project. One of the major contributions was from the side of contractors. These were the companies who actually built the railway line along with tunnels, bridges etc. The success of the project largely depends of the success of the contractors. But the success of the contractors came through steps taken by govt. These steps are: -

Contractors were selected from pre-qualified list. Only recognized contractors were given the opportunity to quote for the work. This was done because many times contractors fail to complete the task because of limited cash and labor flow.

Decision making by the contractors had to be approved by the higher authority. Therefore it was made clear that in any complex situation where decision was needed from superiors, the reply will be given within 48 hours. This method helped the contractors continue their work without any delay.

All the work done by contractors was for a special purpose of getting compensation. And the problem with government contract is that the payment for the bills prepared by the contractors used to take lot of time. And since contractors were not receiving money, work would stop due to limited cash. Mr. E Sreedharan and their team brought a new system in which 75% of contract money would be paid within 48 hours and balance within 1 week. This helped in wiping out the cash flow problem of the contractors.

When any project is undertaken by contractors, they require advance funds first to start the work. In Konkan project, 10% -15% of advance funds were mobilized when lot of equipment’s were involved.

So every month Mr. E Sreedharan used to have a meeting with the contractors & engineers where they used to discuss problems & difficulties of the project and solutions were drawn out on the spot.

Contractors used to work with big equipment’s like dumpers, cement mixtures, compactors, excavators etc. This construction equipment’s run on fuel and it was difficult for the contractors to bring fuel to the site. So project team solved this problem by setting up fuel outlets at critical areas.

The konkan railway line has many tunnels and it was difficult to make these tunnels without any sophisticated equipment which were only available in foreign countries.

So the government made sure that the equipment was imported before the work began and were given to the contractors free of cost.

One of the most important benefits given to the contactors was incentives on completion of work before time. Whenever a contractor used to finish his/her part of work before time, incentives were given. But if he/she took more time than specified, penalty was imposed on them. This method motivated the contractors to finish the work early.

Q4. What do you think were the areas of risk? How were the risks managed / mismanaged?

Risk Managed / Mismanaged

Disapproval/resistance from beneficiary state govt.

This risk was managed by Mr. George Fernandes & Mr. E Sreedharan by taking serious talks to the heads of the state and making them believe the benefits that can be derived from this project. Bureaucratic approach was taken to solve this problem.

Budget for the project The budget derived to railway project in India was around Rs.250 to Rs.300 crores and already 20 – 25 new railway projects were on going. This was a serious problem because then it would take 25-30 years for completion of the project. The govt. also issued tax free bonds but it was a failure due to share market scam. At last only choice was External Commercial Borrowing (ECB) through which the govt. was able to raise Rs.400 crore.

Janata Dal party collapsed Konkan Railway project was undertaken under Janata Dal party. Within a week after Mr. E Sreedharan was appointed as CMD, the party fell and Mr. George Fernandez was no more the railway minister.

Difficulty in acquiring land For the project, the govt. had to acquire land from 40,000 landowners. This was a major problem as people would resist from selling their land. A new strategy was developed to tackle this problem. Landowners were given compensation for the land as well as rental charges for 1 to 1 ½ years till they are ready with their new house.

Difficulty in making 760 Km line

Constructing 760 Km railway line would take many years and huge cost. But this was reduced by adopting a new strategy where in Konkan line was divided in 7 zones and construction was started at each zone at the same time. By this the time as well as cost of the project was reduced.

Risk of contractors Many times in construction project, the risk of incomplete work from the side of contractor is very high. This risk was managed by giving contract only to recognized, pre-qualified contractors who have adequate cash flow.

Political Interference In a cross state construction project, many times there is government interference. This problem aroused when GOI stopped work in Goa sector for 9 months. There was no

solution to this had a terrible effect on the rest of the project.

Difficult geological conditions The project only had 5 years’ time. In this time, all kinds of survey, clearance, and geological inspection had to be done. Tunnels needed geo-technical investigations, but there was no time. Accidents took place while excavating tunnels in mountains. This delayed the project.

Environment impact While some people thought that the project was economically beneficial, some environmental groups raised questions towards its impact to ecology in the konkan area. These groups stated that the project would cause destruction of ecology, damage to historical sites and disrupt the lifestyles of people in densely populated coastal region.

Q5. Identify the areas of good communication or the lack of it?

The Konkan Railway project is 760km railway line connecting Bombay to Mangalore

along the West Coast of the country. So it is very important for the people who are

involved in this project to communicate with each other for the completion of the

project. The main factor in this project is to establish an excellent communication

network. To reach Bombay to Ratnagiri used to take so many hours. So they hired

DOT lines and then established a good communication network with the headquarters

of each of the Chief Engineers. They were all given FAX machines, they were all

given computers. A computer networking was done, so that everybody can have any

information he wants from anywhere and message can be passed on time.

Every month on a nominated date Mr. E Sreedharan would sit with the contractors

and concerned engineers and used to see the problems faced by the team and on the

spot used to sort out the problems. So that there is no difficulty at all for the progress

of the work.

Mr. E Sreedharan started a novel experiment or a new style to keep everybody well

informed. Every Monday they had a meeting with the Head of Departments, where all

the problems connected with the whole project were discussed. They analyze the

slippage in the previous week and then they decide what is required to be done in the

next week. On the first Monday of the month, the field engineers are also brought into

this meeting, so that everybody contributes and everybody knows what are the

priorities of management, what is the view of the management on any issue.

Q7. What were the new technologies used in Konkan Railway project?

a. Optical fibre cable

First time in the history of Indian Railway, Optical fibre cable was used in Tele-communication network. At that time it was a new technology which sensed a lot of opposition but today optical fibre cable is a common thing. Today in the Indian railway system, the konkan railway has the longest stretch of optical fibre cable.

b. Incremental launching method

This is a new technology used for the 1st time in India (same technology was used in Delhi Metro). Incremental launch is a method of building a complete bridge deck from one end to other end.

c. Ballast less track

In India, traditional railway lines are most famous. You can see these railway lines in Mumbai. A disadvantage of traditional track structures is heavy demand for maintenance which leads to heavy maintenance cost. This can be overcome by using ballastless track. This track is very expensive in first cost but its whole life cost can be lower because of reduction in maintenance requirement. This ballast less track was used by Konkan railway in many tunnels.

d. Gas pressure welding

A new technology of gas pressure welding came from foreign countries was used. People were trained for this technology in Japan. The advantage of gas pressure welding is that it can be done at the site itself. Traditional welding methods can only be done in welding shops. And it was a problem to get the welded railing to the site again.