Arbitration & Gatishakti

The Union & State governments in India are increasingly relying upon large expenditure on infrastructure as the key to getting The Indian Economy’s growth story back on track after the COVID-induced slump. In the Union Budget for 2022-23, it became clear that increased monetary allocation to infrastructure development will continue for the foreseeable future. The National Infrastructure Pipeline (NIP) has outlined an investment of Rs. 111 Lakh crores for the period of 2020-25. The Union Government has also paid extra emphasis to ensure that there is ample coordination between different ministries and agencies involved in the implementation of infrastructure projects. The Gati Shakti initiative is supposed to bring the diverging synergies of different government arms together using technological and logistical streamlining. However, all of this is easier said than done, infrastructure projects in India are often marred by significant time delays and cost escalations leading to long-drawn-out legal battles and commercial disputes. How technological, legal, and administrative reforms can be the foundational stones for India’s infrastructure growth and much more was discussed at the session on Arbitration & Gati Shakti at The India Law Forum organised by The SKOCH Group. Experts gave their opinions on the issues plaguing Indian infrastructure industry in the legal, administrative and technological areas and made recommendations for the way forward.

Infrastructure delays & Gatishakti: The Broad Contours

The current economic environment has presented a plethora of complex challenges for policymakers to deal with. Unemployment, rising inflation, and increasing liabilities for State governments coupled with falling revenues have created an economic reality that calls for a wider reset in terms of policy planning and execution. With the Union government at its helm, The Gatishakti initiative plans to solve multiple issues related to infrastructure construction and management in India. However, in its current state, the Gatishakti initiative is just a website that contains designs and other details for various projects. To solve the multiple challenges faced by the infrastructure sector in India, Gatishakti has to evolve into a platform that offers efficient and well-directed solutions to major issues such as time and cost delays and resultant judicial and legal ramifications. The increased cost of projects because of delays is not the only aspect of this problem, infrastructure-related legal battles continue to drag on for years making The State one of the biggest litigators in India. If spending on infrastructure has to lead to economic growth for India, there have to be dedicated policy interventions, especially in the area of technology to smoothen out existing roadblocks and pave the way for on-time implementation of infrastructure projects. Speaking at the session Mr Pranay Lekhi, Legal Advisor, International Arbitration, AllenOvery, UK made the remarks that “How India manages to deal with the increasingly frequent infrastructure and construction disputes will determine the success of India’s growth story”.

BIM (Building Information Modeling) and Issues with Infrastructure projects in India :

There are revamps needed in the administrative, legal and technological areas to find solutions to issues linked with Infrastructural projects in India. However, more often than not technological changes are easier and faster to bring about than legal or administrative changes. In terms of the use of technology in the construction of infrastructure projects, the level of technology prevalence is abysmally low. A significant number of projects in India still use paper-based techno drawings, compared to technology-oriented project management in other parts of the world. Mr Sameer Kochhar, Chairman, SKOCH group spoke about this issue at the session and said that“BIM can help in figuring out through a knowledge-based argument to have a real-time view of where the bottlenecks are”. By using BIM, impediments that cause time and cost escalation in these projects can be rooted out in the planning/ pre-construction phase so that projects are commissioned in time. 

BIM is a digital model of a building that stores data and information digitally and helps to optimise projects with integrated analysis, generative design, and visualisation and simulation tools. The use of BIM to create a collaborative data platform that stores all the information about a construction project from day one in terms of designs and other contractual details can be the way forward to empower the Gatishakti portal into a holistic solution to re-engineer the issues India faces on the front of infrastructural delays. Mr Sunil Mawkin, Counsel, AllenOvery, UK  also spoke on the issue and commented that “Getting the design right from the very start is fundamental for long term success of construction projects”. If it is ensured via collaborative and technology backed platforms that there are no structural and design flaws from the outset of the project, then a lot of time and cost escalations can be avoided.

But any platform such as Gatishakti should not just include data from government projects but also involve the private sector as an active partner in terms of data sharing and project implementation. Dr M Ramachandran, Former Secretary, Government of India also expressed optimism on this counter and said that “Subsequently private projects can also be on-boarded on the Gatishakti portal”. This can work wonders to bring the much-needed synergy that the Gatishakti initiative is trying to achieve. There also have to be concerted efforts to upskill the small and medium players in the construction industry with technology so that they do not fall behind the big players in the industry. Mr MK Sunil, Country Manager (AEC), Autodesk India also shared his views on the issue and said that “Large construction companies have actually started using technology that actually leads to transparency and accountability, but small and medium players still don’t deploy technology optimally in the construction space”. To truly empower the construction sector there has to be widespread adoption of technological measures by the smaller players as well. It has been estimated that the use of BIM can help in reducing construction costs due to delays and result in saving trillions of Rupees for the taxpayer and the exchequer. There has to be active stakeholder contribution from The Government, Industry, and private sector alike to translate the idea of Gatishakti into a viable project with solid outcomes. The esteemed panel also made several recommendations on several key issues, which are as follows:

• There have to technological, legal, and administrative reforms in Infrastructure if India has to speed up its return to an economic growth trajectory
• India has to catch up with the best global industry standards related to infrastructure and adapt to the emerging technologies to derive maximum output out of huge government expenditure on infrastructure
• As of now, The Gati Shakti platform remains a web portal with project details from government ministries, If it has to become an effective tool for structural transformation there have to be collaborative efforts with private players to make it more agile and efficient
• How India manages to reduce its skyrocketing infrastructure project costs and delays will have a major impact on how much investable the infrastructure sectors become in India
• Efficient technological interventions such as BIM can root out structural flaws and bottlenecks from the time a project is commenced, leading to fewer disputes and fewer legal battles
• There have to be dedicated efforts to ensure that the use of new technology is actively encouraged, due processes need to be created so that technological advancements do not get stuck into an operational quagmire
• There have to be targeted combined efforts from the government and industry to make technology an important part of The Gatishakti initiative so that its desired goals can be achieved