The World Bank is pioneering several innovations across India’s infrastructure sector to boost economic growth and create new jobs. Infrastructure development in India is still in its early stages, and provides vast scope for learning and innovative experimentations. Several initiatives across World Bank financed projects in the areas of clean energy technology are quietly paving the way for innovations being emulated across the country.
With this, the Bank has shifted its focus from merely aiding the construction of physical assets to environment impact assessment and mitigation, fulfilling part of a larger civil society objective in the planning and development of infrastructure projects.
Venu Rajamony, Joint Secretary, Department of Economic Affairs, Ministry of Finance says: “India is changing very rapidly and the paradigm of engagement with India also needs to change. The World Bank financing in India constitutes a very small portion when compared to the kind of resources that get generated domestically within the country for India’s economic development. What is critical is the value addition that an organization like the World Bank brings which we define as innovations or best practices which are relevant to India and are adapted to Indian conditions.” He was speaking after a recent meeting jointly organized by the Government of India and the World Bank to review all World Bank financed infrastructure projects.
World Bank’s net commitment to the infrastructure sector across 22 projects is worth $8.5 billion, which is about 32 percent of its total portfolio for India. Of this, 6 projects are in the energy sector amounting to about $3.6 billion.
“The World Bank too is conscious of the fact that it is not about resources alone (though that is important too) but the change that the Bank can bring about in development work through its innovative ideas, sharing knowledge from its global experiences, and hand holding pilot projects where they experiment with new methods. Of course, these have to have the potential for replication, otherwise they would be of limited value,” Rajamony said.
Following are some highlights of the innovations being tried out in different World Bank supported infrastructure projects in the energy sector.
Energy Sector
The World Bank is engaged in 7 energy sector projects with a total commitment of about $4 billion where several innovative ideas to strengthen environment management; corporate governance, better project management, organizational efficiency, and institutionalizing cutting edge technology are being integrated in projects.
Power Grid Corporation of India (POWERGRID) In its efforts to assist the government in creating efficient and sustainable institutions, World Bank is continuing its partnership with Power Grid Corporation of India (POWERGRID) since its inception 15 years ago, during which time the company has nearly tripled its transmission network to become one of the world’s largest electricity transmission system operators.
POWERGRID set up the National Load Dispatch Center – an apex body of the Regional Load Despatch Centers which ensures integrated operation of the national power system. Today these regional centers have become an epitome of technological excellence in grid operation. They involve state-of-the-art technology in real time monitoring and control of the grid to enhance safety, security, reliability and stability in all regions of the country. These facilities have minimized grid disturbance/failure and facilitate quick grid restoration, in case of failure. POWERGRID is also the first amongst World Bank partners in India to come out with a Sustainability Report covering its environmental and social performance. The Report not only reiterates its commitment towards environment and social issues, but also its integration in POWERGRID’s operations.
Maharashtra State Electricity Transmission Company Ltd (MSETCL) A four-year World Bank partnership with the Maharashtra State Electricity Transmission Company Ltd (MSETCL) is helping transform a traditionally-run state-owned company into a commercial business entity focused on meeting the needs of customers and the challenges of a competitive market.
Through a series of World Bank assisted consultations with key stakeholders including employees, customers (mainly the distribution companies), equipment and services suppliers, state government, and the state power regulatory authority, MSETCL took stock of the company’s strengths, weaknesses, opportunities and threats likely to arise from the unprecedented expansion in transmission investments. Through this process MSETCL developed a transformative business plan.
The company then transitioned to an “alliance” approach, with inbuilt incentives for both MSETCL and its vendors to co-operate. For instance, incentives for vendors were introduced for early completion of projects and the concept of sharing savings in project costs between MSETCL and vendors was also introduced.
The approach paid off, and MSETCL was able to attract globally-reputed transmission vendors to take up contracts worth around US $1.5 billion in May 2009. The contracts are expected to save MSETCL U$100 million compared with its internal cost estimates.
West Bengal State Electricity Board (WBSEB) Experts say the ability to stretch boundaries and take risks are key to innovation. Take the case of West Bengal State Electricity Board (WBSEB), comprising 25,000 employees and 6 million customers. The state and the Bank team focused on corporate governance (such as restructured board of directors), introduction of accountability and empowerment structures through clearly measurable performance matrix, and greater autonomy to public enterprises on critical organizational efficiency issues.
The World Bank team’s role was that of a facilitator across stakeholders, sharing experiences of past restructuring efforts in India, sharing global best practices, and making itself available to participate in brainstorming sessions and meetings with decision and opinion makers.
This innovative approach represents a fundamental change from the way the Bank is often perceived – as a driver of privatization with a desire to control and steer reforms.
The Haryana Power System Improvement Project Another innovation that is being acknowledged is monitoring of civil works. The Haryana Power System Improvement Project has pioneered the use of third party quality assurance consultants who are coordinating between the utility and the contractor. The practice is helping in the flow of information on good practices in project management from the consultants to the implementation team as well as in enhancing accountability and transparency in transactions.
Both project team members and the government are enthusiastic that such innovative practices will go a long way in helping India achieve the competitive advantage required for creating and sustaining growth.
RSS