CP: Economic meltdowns always trigger a flurry of public investment programmes, primarily to get economies moving and create jobs. Construction of the Interstate Highway System in the U.S. is perhaps a case in point. Do you see the same happening in India as indicated by the Rs. 5.54 lakh crore allocation in the 2021-22 Budget for infrastructure development?
Sreedharan: See, in America, after World War II, there was a complete economic breakdown. President Eisenhower built the highways as he wanted to revive the economy and generate employment. That was intended to help the economy to grow. We are also faced with almost the same situation here. The economy has plummeted due to Covid. This is the best time to lay the foundation for growth of infrastructure. Earlier, the understanding was that economic development happens in rural areas, in agriculture. That battle we have won. This is the correct time to develop urban infrastructure and what Finance Minister Nirmala Sitharaman has done is the right thing. But, I would still say that this is not adequate.
There is no meaning in talking about investment if we don’t have a clear plan of action to mobilize the resources. We are depending entirely on taxes and import duties to fund development. That is not enough. We have to generate wealth in this country. And we cannot go on being dependent on borrowing. Since Independence, we have been going on borrowing. This must stop.
You mean to say you don’t see a clear plan of action underpinning the investment plans? Like Jawaharlal Nehru who wanted to create a network of public infrastructure such as dams, hydel projects, universities, etc.?
You are right, we need a national plan of action. And also a plan to raise the resources. Simply depending on the World Bank, ADB, etc. is not the right thing to do.
How then can we raise money for infrastructure development? Through new instrumentalities like the KIIFB?
It is okay to borrow from within the country, but if we go on borrowing from outside, it will prove to be a burden in the long run. Take the case of the Indian Railways. Why can’t they mobilize resources from within by carrying more passengers and more freight, charging a higher user fee? People are willing to pay if we can assure quality services. They should have raised the user fees long ago to mobilize money for railway development. For the past several years nothing of the kind has been done, except for some adjustment here and there. That applies to all aspects of government.
But is that possible?
A: Yes, by all means. Take land revenue, for instance. We are paying a very small sum as land tax. My son who lives in the U.K. is paying land and house tax which is 40 times that in India. Why don’t they collect a higher tax from people who can afford it? I can understand if a person living below the poverty line cannot pay. They can be given some other help.
One problem we face is loss of faith in the system… There are very good projects, but people don’t trust the government to complete them on time and then there is corruption…
True, our delivery system is very bad. We are not able to deliver projects on time and within the budget, ensuring that they are corruption-free. Why? My basic analysis is that we are entrusting projects to people who are not competent, very often with the IAS people. See, most of these projects are highly technical. Scientists and engineers can execute them with understanding, but the government would most often entrust them with the IAS people. There are brilliant ones among the IAS officers, but the problem is that they are not there for long. They get posted to different places and posts. So, there is no commitment, no accountability.
Take the case of the Metro projects going on in the country today. Except those being handled by technocrats, all the Metros are behind schedule by three to five years. In the case of the Kochi Metro, we did not allow anyone to interfere. There were some delays in land acquisition, but nothing else. So, people who handle projects should be technocrats with good track record and credible integrity.
It is very easy to draw up a project and put an IAS man in charge. They won’t be there for long. And in our country, their tendency is to control everything, not allowing the technical people to work with freedom. That will hurt the project execution and its quality. This type of delivery has to change. Wherever possible, only technocrats with proven integrity should be put in charge of projects and they must be given sufficient tenure to complete the project.
You were fortunate to be given a free hand…
When I was being selected for the Konkan Railways, it was the Minister who made the nomination. George Fernandez was the Railway Minister at the time. I gave him the blueprint of the Konkan Railways, particularly the project costs and how money could be raised. That appealed to him very much and that is why he put me in charge. But my appointment had to be approved by the Public Enterprises Selection Board. The government order was to appoint me for three years. The PSEB, on their own, decided that Konkan Railway cannot be completed in three years. They, therefore, recommended to the government that I must be appointed for a period of five years or till the project is completed. The government agreed.
But when the new government came, they wanted their man to be posted in my place. They wanted me to go after two years! They put a lot of pressure on me to resign and go! But I stayed on till I completed the project. So, the right person should be chosen, the tenure should be defined and he should be given full freedom. If you choose the right person, you will not have these corruption scandals. They happen only when the top man is not interested or he is himself corrupt.
You had a lot of freedom with the Delhi Metro…
There was a lot of reluctance to appoint me in the Delhi Metro. It got delayed by eight months on the argument that I was too old for the job. I was well past 60 at the time. It stayed that way until the then Cabinet Secretary Mr. T.S.R. Subramanian put his foot down. I didn’t know him, though. He asked if a Prime Minister—he was referring to Mr. Atal Behari Vajpayee—could hold the country together at the age of 70, why can’t Mr. Sreedharan head the Delhi Metro? That settled the issue. If a man is really good and doing well, why not pick him and give him the freedom to do what he wants in the best interests of the country?
What are the benefits of timely completion of a project?
If you are able to complete a project on time, you can save at least 20-25% in cost. In every project that DMRC has taken up, we have been able to make this kind of savings, because of timely completion and avoidance of corruption. It was only because of such savings that I could reconstruct the Palarivattom bridge free of cost. In the developed world, they are very particular about timely completion of projects.
That is because the work is entrusted with people of proven capabilities and they will not indulge in any malpractice. That trust is required. Here politicians want a share from every project. Actually, projects are often drawn up in such a way that they can take a cut. Several projects that can be taken up at the Central level are done by State governments so that politicians can make money.
The real issue is that high moral and ethical values are vanishing from our society. We need more and more people committed to values. We need to teach youngsters values and integrity, but parents are so busy these days that they are unable to do this.
What is your estimation of the private sector, particularly the corporate sector? Have they been committed to the values that you speak about?
I would speak only about the Tatas. They have shown great commitment. Then there are individuals like Narayana Murthy and Kris Gopalakrishnan. Corporates are not doing enough. Even their CSR funds are manipulated. If you take the CSR content of big corporates, the CSR funds are consumed by themselves and not spent for the common man. I don’t get it if want to renovate my local school. Sense of social responsibility and the idea that they have the responsibility to look after society are missing. In the U.S., most of the universities are supported by corporate bodies. We need a change in the attitude of the corporates. Today, they are concerned only about profits.
Q: Is something fundamentally missing in our education system, particularly as it applies to engineering and pure sciences?
Yes, very much, particularly in technical education. Don’t go by the results of the IITs. They are doing well because they get the cream as students. That is not the case with most other educational institutions in the country. The Foundation for Restoration of National Values that I had founded had filed a PIL on poor standard of technical education in the Kerala High Court. The government tried to escape saying that it has set up a committee to study the issue. The matter is still pending there.
There also seems to be little concern for the environment when we draw up and execute projects. How can we build without hurting the environment?
When we implement a project, we must ensure that we do not hurt the environment. We should also ensure that there is no displacement. I have practiced that all along. When implementing the Konkan Railway project, I had to cut down trees in the reserve forest. The State government had given me the go ahead, but the Centre had not. Fortunately, the secretary at the time was T.N. Seshan, who was my classmate. He asked me to go ahead with the warning that he will impose a fine on me as required under the law. He fined me Rs. 1 crore. There was no other option, but I am clear that measures necessary to reduce environment impact is absolutely essential when a project is conceived and executed.
Looking at the recent disaster in the Himalayas where a glacier avalanche resulted in flash floods that destroyed two hydel dams and claimed several lives, don’t you think we have gone too far with our constructions in the Himalayan region?
The Himalayan region is very fragile. It has to be handled very carefully. Let there be no doubt that any intervention there will have definite consequences. The water sought to be stored there is not meant for that area. Why should we then think of constructing huge dams and all that? If you see the Himalayan geology, it is unpredictable. The two power stations got destroyed because they were wrongly located.
I have myself had a little experience there. The railway line from Jammu to Srinagar was thought of in 1998. It was sanctioned in 2004 by the Atal Behari Vajpayee government. Among the engineers, there was a lot of confusion about what the alignment should be. Majority disagreed with the alignment already planned. The Railway Board did not agree. They put committees after committees. Work started in 2005 and should have been over in six years, but even today only 30% of the work has been completed.
Some people went to the Delhi High Court against it. The High Court appointed me as a technical adviser. The question was whether the railway line was being laid in the right alignment. I went there and studied the terrain. I found that the way the alignment had been taken, it will not hold. The geology of the Himalayan region is such that it will get washed away. I submitted my report stating that the alignment is faulty. I also stated how the alignment could be reworked. This was done in 2014. Even today they have not taken any decision on it. They have sunk a lot of money and don’t want to lose it. I said it is better to forget the money already spent and have a new alignment as it would be more stable.
What should be the national perspective on the country’s infrastructure?
We have a long way to go there. For instance, we are still dependent on coal mines for generating power. Most countries have given up coal mining, but we have not. The country has tremendous potential to tap solar energy. We should use our water resources only for drinking and irrigation. We need people with vision in the Planning Commission, but sadly that has been dissolved. At the NITI Ayog today, if you go and meet a member, he has no time to think. He is so busy with bureaucratic work. He is always running around attending meetings. Nobody has time to sit calmly and think what is needed. We need a think tank. The government should take advice only from them. I am not against putting people in positions based on political considerations. We have a lot of qualified people, but the government would pick up only some IAS people.
Don’t you think there is also need for more discussions and more efforts at building consensus on reforms and development?
The ruling and Opposition parties must find some common ground on such issues. Everybody should keep the country at the top.
At the NITI Ayog today, if you go and meet a member, he has no time to think. He is so busy with bureaucratic work. He is always running around attending meetings. Nobody has time to sit calmly and think what is needed.