Why Do Some Infrastructure Projects Succeed While Others Do Not

In an interactive session at a business school recently on the ‘need for vision in infra-projects..’, we debated for over an hour and unanimously agreed that, building a consensus among all stakeholders on the need for the project, is a pre-requisite to its success. I think that the larger or more complex the project, the more this is relevant.

In my experience of 30 years in government organisations and in Fortune 500 Cos in several industries including defence & aerospace, consulting & IT, petroleum & petrochemical, shipping & logistics, where I had the opportunity to contribute in multi-country projects, I do not remember spending time on this aspect of the project in a structured way. Thus after some reflection, I had taken up this invitation to deliver a lecture and facilitate this session with bright young MBA students, who had taken infrastructure as one of their elective subjects.

Am sharing the takeaway from the session, for the benefit of those interested in infrastructure projects.

Wikipedia defines infrastructure as …” basic physical and organizationalstructures needed for the operation of a society or enterprise Or the services and facilities necessary for an economy to function”. Infrastructure could be ‘hard” or ‘soft’; public or private; rural or urban; critical or general. ‘Soft infrastructure’ like economic infrastructure including financial management systems, natural resource management and related legislations; or cultural infrastructure including sports facilities, museums and libraries- deserves attention as ‘ hard infrastructure’ like energy infrastructure including pipelines, electricity grids or transportation infrastructure including roads, ports and airports. Our discussion in the business school focussed on hard transportation infrastructure.

One definition of vision comes from but Burt Nanus, who defines vision as a ‘realistic, credible, attractive future for [an] organization’. A vision attracts commitment and energizes people, establishes a standard of excellence and bridges the present and the future. Simply put in the project context, it helps us with the ‘why”; for the project.

As an example, let’s consider the stakeholders of a transportation infrastructure project like an international airport that is being planned in the outskirts of one of India’s major cities for about a decade already. Who do you think are the stakeholders for the project? Most of you reading this would surely come up with names of stakeholders groups like:

  • governments ( central/state, regulators…);
  • non-government organisations ( opposition parties; NGOs…);
  • airport users ( public , who will fly from the airport and pay user development charges..);
  • developers/operators ( construction companies; airlines; logistics companies, investors…),
  • residents ( including land owners on the site/area…) etc.

Even while preparing the above list, one begins to understand the differences in perspectives between the stakeholder groups and appreciate why some could go to great lengths to make their voices heard for, or mostly against the project.

We had some amusing moments during the stakeholder-role-play in the class, with more students competing to represent the residents (land owners) and the airport user groups, whereas there were few takers for the roles of the government group or the developer group for this airport project-case-study. The stakeholders basically wanted to know,…’what is in it for me.’.?

You could repeat the exercise for a port, road or a manufacturing project and arrive at a similar outcome.

To get to a ‘why’ for the project and evolve a vision attracting commitment of stakeholders, we need to arrive at a WIFM (what is in it for me) for each stakeholder without which, large/complex projects land up with time overruns, which in turn contribute to cost overruns.

With India and most other emerging economies, pursuing significant investments including in many Greenfield infrastructure projects over the next decade, the need for evolving consensus on a ‘why’ for each project and a WIFM for each stakeholder group, could be good start towards successful project execution.

Then the challenge is – how do we work out a WIFM for all stakeholders? Who should facilitate this and at what stage? What do you think?

      Subhasis Ghosh

“Subhasis Ghosh has 30 yrs diversified experience in several sectors, including a 3 years diplomatic assignment in the Embassy of India, Moscow. He has experience working with two Fortune 500 conglomerates -Reliance Group & Maersk Groups. Subhasis is presently helping start-ups and M&A in supply chain related businesses through his business incubation & investment advisory venture-Apex Group (www.apexconsulting.in).”

Be the first to comment on "Why Do Some Infrastructure Projects Succeed While Others Do Not"

Leave a comment

Your email address will not be published.


*


This blog is kept spam free by WP-SpamFree.