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Avoiding Time and Cost Overruns in the Construction of Rohtang Tunnel

Narinder Gupta is on Deputation to Institute for Defence Studies and Analyses, New Delhi. Click here for detailed profile
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  • December 14, 2009

    According to media reports the Cabinet Committee on Security (CCS) has finally approved the construction of a nine kilometre long tunnel at Rohtang Pass, located 51 kilometres from Manali at an altitude of 13044 feet, at the total revised cost of Rs. 1450 crore. The construction work, to be completed by 2014, is believed to be outsourced to a joint venture company between AFCON (India) and STRABERG (Germany). This tunnel project was conceived in 1983 as a strategic project to provide an all weather route to Leh, and to Lahaul and Spiti Valley in Himachal Pradesh. A feasibility study was conducted by M/S RITES. In 2003, the project received initial CCS in-principle approval for incurring Rs. 880 crore, with the provision that following the tender, but before award of the contract, it will approach the cabinet committee on security with a firm proposal. However, the project could not progress on account of various technical problems and procedural issues. Subsequently, an Australian company M/S Smec International was appointed as consultant to prepare a detailed project report and provide consultancy services for the Rohtang Tunnel.
    The revised approval for this project will not only boost the infrastructure in the valleys of Lahual and Spiti but will also provide an all weather route to Leh. The underground tunnel will help completely avoid the blockades caused by heavy snowfall which blocks the road and poses serious problems in maintaining road communication for more than four months a year. Besides heavy snow fall, high velocity winds and sub-zero temperature further aggravate the problem. By design, the tunnel will be horse-shoe shaped. The timely completion of this project is essential, because a considerable period has already elapsed. Had this been started in 2003 or 2004, by now it would have been on the verge of completion. Adherence to time frame now seems to be the top most priority. The construction work has been awarded to a contactor and the consultant is already in place to advice on various technical and other related issues. It is expected that these agencies will fully realize the urgency and commitment to complete the work well before the stipulated time frame. However, the oversight and monitoring agency will have to guard against impediments during the construction stage to achieve this aim. Here, it may be worthwhile to note some important factors that are generally responsible for causing time overruns.

    It is necessary to focus on the most crucial aspect of time and cost overruns during the construction stage. In the first place, a period of five years has now been fixed for the completion of the tunnel. The effective working period for the construction of the tunnel will be a little over three years excluding the non-working period during the course of the year due to climatic factors. It is therefore essential to keep the effective period in view for its timely completion and complete each stage of construction to avoid time and consequently cost overruns.

    Many studies of several capital intensive projects by the Ministry of Statistics and Programme Implementation have also highlighted the extent of time and cost overruns in public sector projects. One such study covered 290 projects in sectors such as atomic energy, civil aviation, coal, fertilizer, steel, mine, petrochemicals chemicals, petroleum, power, railways and telecommunications. Of these projects, 12 had a project cost of a Rs. 1,000 crore; 110 had a project cost above Rs. 100 crore and 168 had project costs between Rs. 20 and 100 crore. The total outlay for all these 290 projects was Rs. 69,649 crore. Out of these projects, 162 were inordinately delayed resulting in an additional capital expenditure of Rs. 20024 crore, which was 73 per cent above the original outlay of Rs. 27,568 crore. The study came out with multiple reasons for time and cost overruns including technical, administrative, managerial, etc. Many other studies of similar nature have also been conducted from time to time at the project monitoring and review stage, bringing out a host of factors that cause delay at different stages of projects starting from pre-commissioning to implementation. Some of the important factors include changes in scope, alterations in design, delay in procurement of equipment, shortage of materials like cement, steel, explosives, etc., difficulties in transporting equipments to site, shortage of key personnel during the implementation stage, inadequacies in planning, problems in land acquisition and rehabilitation, climatic and environmental factors, lack of monitoring, contractual problems, poor performance of consultants, vendors and contractors, law and order problems, inadequate infrastructure support, etc. In addition to these factors, risk assessment at the stage of project implementation is required on a regular basis to take timely remedial action. Since Rohtang Tunnel is a highly capital intensive and risk intensive enterprise, and it is exposed to hostile climatic and weather conditions, the management of work for its timely accomplishment assumes the highest importance. The country needs to see its completion by the stipulated time (2014) and thus avoid cost overruns.

    Some of the critical constraints during the construction stage of the tunnel can be climatic, performance of the vendor and the contractor, problems in mobilization of equipment, shortage of manpower, associated risks during construction and other usual constraints associated with any capital intensive project. Therefore, the Border Roads Organization (BRO) should anticipate the likely hurdles and constraints and take pre-emptive action to overcome these. For this purpose, the BRO could consider constituting a high level monitoring committee not only in the headquarters but also at the site. This committee can adopt various monitoring techniques and also co-ordinate with the contractor, the consultant and other important agencies to sort out various aspects that may have the potential to cause delay. The committee may also monitor the balance between physical and financial progress to avoid any significant mismatches during the construction stage. This will help achieve timeliness within the approved cost.