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 pursuing this tall order? There is now a general consensus that the answer lies mainly in the creation of high quality infrastructure – physical, social and economic. How the Interstate Highway System launched by the Eisenhower administration in the ’50s helped create a more mobile and vastly 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 2000 km stretch of the Grand Trunk, linking six Indian states, still acts as the backbone of commercial prosperity across India.

Several studies in the past have shown that the spread of rural infrastructure assists economic growth and leads to a decline in poverty. According to the Rural Infrastructure Report, recently brought out by the NCAER, development of rural infrastructure has a five-fold impact on the economy. Good infrastructure creates better access to employment and provides further earning opportunities;
increases production efficiency; gives access to previously inaccessible commodities and services; helps citizens save time and, thereby, involve themselves more 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-centric governance in India. The government is already putting in place a transparent and independent regulatory framework for the infrastructure sector, based on international best practices. A committee has been constituted under the chairmanship of the Prime Minister, to closely monitor the progress in all key infrastructure projects, on a quarterly basis. A Viability Gap Grant Scheme has been instituted for supporting infrastructure projects (like power, roads, ports, airports, railways, water supply & urban transport) which, despite being economically viable, are financially unviable. A Special Purpose Vehicle (SPV), called the India Infrastructure Finance Corporation Limited (IIFC), has been set up to lend funds with longer term maturity to commercially viable projects in infrastructure sectors, including projects which become viable after receiving viability gap funding from the government. Comprehensive Model Concession Agreement (MCA) Frameworks for Public Private Partnerships (PPPs) are either in place or being formulated for the Highway, Seaport & Airport sectors. These MCAs, based on internationally accepted principles and best practices, unbundle risks and costs, and allocate them to the party best suited to manage them. Rail container movement, so far monopolised by the public sector entity, CONCOR, has been thrown open to competition, making private sector entities eligible for owning and operating container trains.

Today, the sectoral policies at the national, regional & local levels are being developed around ‘touchstone’ principles, like: (1) Efficient use of existing assets and optimal allocation of additional resources, (2) payment for services, (3) equitable contractual structures, (4) transparent process of procurement, (5) fair regulatory framework, (6) enabling institutional infrastructure, and (7) sustainable incentives and concessions.

New Demands on Infrastructure Management

As path-breaking concepts, frameworks and methodologies are being evolved, at the national, regional and local levels, especially in the 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 for mobilizing and administering project resources.
 Engineering and technical skills for ascertaining the technological soundness of the project.
 Skills in Participatory Learning & Action (PLA), Information, Education & Communication (IEC), and Strategic Environmental Assessment (SEA) to evaluate the location-specific social, economic & environmental impact of the project.
 Organizational & capacity-building skills to ensure the sustainability of the project.

Need for Holistic Training

With a huge investment requirement of the order of about Rs.14.5 trillion ($320 billion), over the next six years, and a spate of new investor-friendly policies in the offing, Infrastructure is all set to become the most ‘happening’ sector of the Indian economy. The immediate requirement of the Indian economy is a pool of holistically trained domain-ready infrastructure managers, who have the ability and grit to (a) convert the huge investments into quality infrastructure facilities; (b) upgrade the existing infrastructure set-up; and (c) sustain high infrastructure service levels by adopting better management practices. Be it physical, social, economic or environmental infrastructure, the demand for such holistically trained managers is going to be unprecedented.

A Trail-blazer

In response to this crying need for domain-ready managers the first-ever comprehensive Post-Graduate Diploma in Infrastructure Management (PGDIM) Programme in the country was launched in August 2005. The programme, offered by Karnataka’s prestigious Visvesvaraya Technological University (VTU), is being conducted by the School of Management for Infrastructure and Development Strategies – India (MINDS), at Bangalore. MINDS is a Division of the Centre for Symbiosis of Technology, Environment & Management (STEM), a professional research group with nearly two decades’ standing in Development Research, Consultancy & Training.

The PGDIM is a one-year full-time programme for graduates in all disciplines of engineering and post-graduates in other disciplines. The curriculum is designed on a holistic approach to Infrastructure Management covering Project Management; Marketing; Contract Management; Infrastructure Finance; ICT Applications; GIS Applications; Strategic Environmental Assessment (SEA); Legal & Regulatory Environment; and Emerging Paradigms. The programme participants also work on live projects being implemented by reputed infrastructure organizations, and gain hands-on professional experience.

Based on the encouraging experience of running the unique PGDIM Programme, VTU is commencing a new format two-in-one PG Programme in Infrastructure Management from the academic year 2007-08. Very modular in structure, this innovative programme provides for a ‘Dual Qualification Option’ whereby a student receives a Post-Graduate Diploma in Infrastructure Management (PGDIM) on successfully completing the first year and also an MBA Degree in Infrastructure Management, after the second year. One exceptional feature of the Dual Option PG Programme is that it is a highly modular arrangement whereby a student needs to make up his/ her mind only midway or even at the end of the one-year PGDIM whether to move on to the second year of the MBA.

The second year (MBA level) comprises two semesters and includes an advanced Internship by way of extended project assignments. An additional feature of the MBA is that it also provides for specialization in areas such as Urban Governance & Management, IT Infrastructure Management, Communication & transportation, Power & Energy, Health, Education, Water & Sanitation, and PPP.

Both the PG Diploma and the MBA Degree are awarded by the VTU.

Good Corporate Response

The first batch students gained hands on experience through Corporate Exposure & Learning (CEL) Internships at leading public/ private infrastructure organisations, 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 Public Grievance Redressal and Emergency Response Systems (PGRS &ERS) in Municipal Environment; (iii) Urban Planning & Renewal; (iv) Planning and Scheduling for Infrastructure Development; (v) Commercial Aspects of Power Business Consulting; (vi) Evaluation of UN-Habitat Programme on Water for Asian Cities; (vii) Environmental Impact assessment for Setting up of Small Hydro Power plants. Naturally, the first PGDIM Batch was welcomed by the industry and received a 100% final placement offer with attractive packages comparable to any emerging sector. The employers include DLF Group, IL&FS and Infrastructure Development Corporation of Karnataka (IDECK).