Yesterday, I came across the ongoing dispute about the NH-8 Delhi Gurgaon PPP project (details can be found at http://www.nhai.org). Reading through the FAQ’s there, the letter for termination issued by NHAI, the revised MOU, the court orders etc, it emerged that a major part of the dispute can be attributed to the working of the PPP— which is what I study in my dissertation.

To cite a few things, NHAI has issued a 17 page termination notice  in Februvary’2012, and this letter liberally uses terms like ” fundamental breaches to the concessional agreement”, “fraudulent nature”, “behind the back”, ” concealed and surpressed”, ” fraudulently concealing”, “gross violation”, “diversion of moneies”, “misrepresented” etc.

Now, what had I studied in my dissertation and why does it suddenly become relevant!!.

1) This case is of a PPP agreement signed in 2002, engineering work completed in 2008, dispute arisen in 2011 i.e., dispute during the working of the PPP.

2) As part of the contract agreement both parties had to fulfill their parts of the commitments. But, along the way both faltered, whereas the termination notices brings out that only the contractor has misbehaved and dishonored his commitments.

3) How was the PPP agreement to be worked? As per my dissertation PPP working is all about coordination of the activities between the agencies. And, this coordination could have been done simply by emphasizing the contractual elements, by proper scheduling and planning, or by social interactions.All the three aspects exist in every work, however the emphasis and the basis on which the work gets primarily performed vary from project to project and is likely to affect how work gets accomplished.

I go a little deeper, and donot make any argument claiming that any one of these methods of coordination is better then the other. It is not so! Instead, I argue that the method of coordination emphasized comes from the experience profile of the managers doing the work. My study helps us better understand how the work that is being done gets done.

Examining this particular PPP project ( NH 8 Gurgaon New Delhi)  in the context of my dissertation research;

i) Emphasis on contractual provisions: While the final dispute gives enough evidence that contractual provisions have been violated from the contractors side, previous land availability problems in the project (project took 6 years for construction) and NHAI having only woken up once the courts forced it, are enough evidence that the government has also not adhered to the contractual provisions. This precipitated into the contractor, escalating the project cost from Rs 600 crores to Rs 1600 crores and seeking additional finance from financial institutions and also readily getting the same.

ii) Emphasis on planning: The project planning and scheduling has also run amock. For a project initially conceived as a 2 years project and taking 6 years to execute, the expectations have changed during the intervening period. However, transparent evaluation of this project planning emerges as the only possible solution to this issue.

iii) Emphasis on trust : Reading the termination notice, it emerges that the trust aspect has taken a summersault. Whereas, previously almost minimal things were being emphasized in writing, the same are being questioned. Here, I will like to digress a bit. In the Indian society, when we say work with trust and social connections, we mean ” violate all the contractual provisions and get your work done tactfully asking the other person to turn a blind eye”. This is not what I mean my social interaction in my dissertation.  What is implied here is , ” contracts are primarily incomplete– so when there is nothing specified about an aspect resolve it with social interaction. Further, trust or social interaction no where conflicts with contractual provisions. Contract aspects have to be honored and followed by one and all.

The Indian understanding of social interactions needs to be modified , and emerges as the first lesson while carrying out this exercise of mapping theory with practice. I am sure many more will follow, as and when I get time to look them up.

Swapnil Garg