CII meets outlines sustainable roadmap for core sector growth

Business Desk
Investment drives sustainable development and if it is well-planned, it can help make current economic practices more socially responsible and environment friendly. Faced with the challenges of matching the pace of sustainable development with rising investment opportunities in the country without undermining the needs of society and the environment, policy-makers, industrialists and legal experts met in New Delhi to debate the emerging issues and identify the way forward.

The speakers debated these critical issues at the two-day Convention on "Large Infrastructure Projects: Sustainable Development & the Law - Emerging Issues & Concerns" organised by the Confederation of Industry (CII)-ITC Centre of Excellence for Sustainable Development, in collaboration with the Society of Indian Law Firms (SILF) and the Bar Association of India. The convention was held in New Delhi on July 25-26.

Mega projects like the ultra mega power projects, dams, highways, airports and large construction projects are today the engines for inducing new development paths in India and addressing the economic, social and environmental dimensions of sustainability of these projects was the special theme of the convention.

Participants explored the range of issues that arise between investment, business and sustainable development, including the existing legal structure in the country. For all, however, sustainable development was the way forward and for this there was unanimity that transparency was an essential ingredient. Also, speakers highlighted the weightage that sustainability issues should be given in taking up mega projects, which were today essential for the country's development.

Said Mr Suresh Prabhu, Member of Parliament, Lok Sabha, "We must look at sustainable issues before embarking on any mega projects, $90-billion worth of which are to be implemented under the 11th Five Year Plan."

But, as other speakers noted, the implementation of mega projects in the country today was being affected by rising incidents of land acquisition disputes; lack of rational procedures for determining compensation; an inadequate and poor public consultation process that lacked transparency and participatory approach, and most importantly by severe procedural delays.

Addressing the issue of Environment Impact Assesment (EIA) Mr. Prabhu said "while no project can come up without an EIA, this compliance should not be treated as a hindrance; instead there should be a concerted effort to prepare environment management plans. The laws are in place, it is the implementation that needs attention"

While Mr Mohit Saraf, Senior Partner, Luthra & Luthra Law Offices, was of the firm view that mega projects were essential for meeting India's projected economic growth rate and easing the growing strain on the existing infrastructure, what was needed that "we avoid following a piecemeal approach as that would increase this strain rather than ameliorate it."

For most speakers, mega projects could be sustainable in the long run by an admixture of government initiatives and public-private participation. As Mr Jatin Aneja, Partner, Amarchand & Mangaldas & Suresh A Shroff & Co., noted that there were several PPP models that the government could follow. "These included strategic sale/ privatisation; concession/ long-term lease; management/ service contracts; and limited development or management or access rights."

But, as Mr. Jyoti Sagar, Founder Partner of J Sagar Associates, pointed out that it was not only introducing greater private sector involvement in the project that was important for its successful execution. "It is the role of the other agencies and bodies, both public and private sector, that are involved in indirect project activities that was important." Here, he cited the example of theBangalore International Airport, the approach road to which was not ready on time even though airport met its scheduled timelines.

Several recommendations emerged from the discussion at the two-day convention, as participants acknowledged that procedural delays were one of the major reasons for derailing mega projects. In this regard, Mr Fali S Nariman, eminent jurist and President of Bar Association of India, pointed out that "dispute containment is the most important thing to save public time and money where large infrastructure projects are concerned." Making a distinction between dispute containment and dispute resolution through arbitration, Mr Nariman cited the example of the Delhi Metro to illustrate his point that arbitration and legal recourse should be the last option where large infrastructure projects are concerned.

Mr Raj Kalady, Managing Director, PMI India, said that "this is an important milestone for project management in India." Accepting and introducing global project management practices could lead to a huge saving of costs and resources adding value to organisations and benefitting the country as a whole."

Focusing on large dams in the North-east, Ms. Krishna Sarma, Managing Partner, Corporate Law Group, said that ensuring public trust and confidence requires that Governments, developers, regulators and operators meet all commitments made for the planning, implementation and operation of dams. Moreover, infrastructural development should be integrated with flood management, canals/command areas development works, watershed management works and so on.

Mr. Raj Lawrence, Vice President, Infrastructure Asia Pte Ltd, Singapore, highlighted the role of the media with regard to infrastructure projects. The media, he said, should educate management teams on environment and sustainability issues, showcase new / innovative technologies, and facilitate exchange of ideas. It was necessary that the media be convinced of the need for infrastructural growth.

Energy was another key focus area. Given that over 90,000 MW of new generation capacity is required in the next seven years with a corresponding investment in transmission and distribution networks, the country needed these projects to come through. Thus, it is critical to examine issues that can help sustain these projects. In this regard, Mr R N Sen, Managing Director, NTPC-ALSTOM Power Services Pvt Ltd, opined that the government should make in mandatory that 5 per cent energy should be produced through renewable sources in all energy producing plants. This was important given the growing environmental constraints and galloping demand for energy.

While stressing that access to electricity is a crucial enabling condition for achieving sustainable development, Mr. K Raja Gopal, Director & CEO, Lanco Anpara Power Pvt Ltd, said the way forward should encompass making all stakeholders partners to growth, a certainty in policies and regulations and effective enforcement of law.

Mr. Satish Jindal, Senior Vice President, JSW Energy Ltd., discussed the regulations on open access to facilitate power trading. Despite transmission capacity constraints, power trading would see a quantum jump, he said with nearly half the power generation capacity coming up in the private sector over the next couple of years being pledged to power traders.

Mr. Amit Kapur, Partner, J Sagar Associates, pointed out that the experiment of the electricity and telecom sectors in establishing industry focused expert regulatory bodies for issues like licensing, rate-making, dispute resolution, establishing and enforcing standards of performance had borne fruit. "A similar mechanism should now be introduced in the oil and gas sector."

Cutting across sectors, participants agreed that to ensure sustainability of the natural resource base, the recognition of all stakeholders and their roles in its protection and management was essential while driving growth. They accepted that today businesses need not follow the conventional path to development with regard to technologies but must use to their advantage the cutting-edge technology options now available to 'leapfrog' the growth process.