"Timely execution and quick decision making hold the key to scaling up"

Union Minister Nitin Gadkari’s plain-speak at NPCC’s Foundation Day event was nothing short of a crash course in management


Traditional lighting of the lamp and bouquets for guests on the podium have become routine at events in the Capital to which ministers have been invited.

But Wednesday evening was a bit different. The state-owned NPCC (National Projects Construction Corporation) was celebrating its 62nd Foundation Day at the Air Force Auditorium. What was refreshing was that, unlike a typical minister’s speech that would largely dwell on the developments or achievements of the ministry under which the PSU operates, Nitin Gadkari, Union Minister for Road Transport and Highways, Shipping and Water Resources, River Development and Ganga Rejuvenation, showed why he is considered a no-nonsense, performance-driven minister in the Modi cabinet. The minister in his speech, peppered with anecdotes on his own performance as PWD minister in Maharashtra, urged the public sector undertaking (PSU) to take control of its own destiny by stepping up its performance and not take the government for granted.

Once a loss-making unit, NPCC was on the verge of closure with current NDA government looking to divest 100% of its holding in the PSU along with another similar PSU in 2017. When the proposal came up for discussion, Gadkari revealed that he decided that he would resurrect it by offering the PSU bigger orders.

The entity, which currently clocks Rs.10 billion turnover and generates Rs.300 million profit, has been awarded two huge orders — a Rs. 240 billion township project in Imphal and an over Rs.120 billion order from the Indian Railways.

Gadkari added that, in a  ministry that had awarded Rs.14 trillion worth of orders, to have a PSU like NPCC operating at Rs.10 billion level is not desirable. “There is no dearth of orders, but NPCC has to rise up to the challenge. I have saved you once but will not always,” said Gadkari.

He impressed upon the management that, instead of focusing on financial audit, the team had to focus on the performance audit of every employee. The minister remarked that the PSU, which has built the Badua dam in Bihar in 1965, has no reason to feel good about its performance given that its profits were not driven by operational performance but was an outcome of “other income” generated from security deposits lying with the undertaking. Gently chiding the current CMD, Gadkari said that if the PSU's staff was proving to be a hindrance to its growth, it should ensure VRS is given to such executives who, instead of pushing the company towards excellence, were proving to be a drain on resources. “While it’s a good thing to have the retirement age increased to 60, ensure that those excelling at work are acknowledged, promoted and awarded. Don’t carry along non-performers till the age of 60, they should be duly 'rewarded' with a VRS,” said Gadkari.

Referring to the National Highways Authority of India (NHAI), the minister said while the institution has been at the forefront for awarding road projects and has a good reputation in the capital market, it was also time for it to take note of people issues and look at doing away with non-performers through a severance package. “Over the next couple of months, instead of road targets, I need to target people who need to be given VRS,” said Gadkari.

Mentioning that the NHAI is so financially sound that it can take additional work of Rs.8-10 trillion worth of projects, the minister said: “Positive attitude is the need of the hour instead of looking at ways to finish the work in any fashion possible and the truth is that we find such persons a lot in government establishments.” He added that instead of breaking the law, they should look at ways to work within the law.

Fast track decision making, only then can the management make a huge difference to growth, urged the minister, adding that he has a quote on his table: “I like people who can get things done. Even I like those people who take wrong decisions. But I dislike honest people who do not want to take decisions.”

Highlighting the functioning of his ministry, Gadkari said it is possible to work with transparency and create a corruption-free system. “I don’t have contractors chasing me. I sign off on contract files worth Rs.20 billion to Rs.40 billion enroute in my car. E-tenders come out in the morning at 10 a.m. and by noon they are awarded. No contractor has to come to the ministry.”

Resources and technology are critical but timely decisions make all the difference, said the minister, adding that “sitting on files for months together comes at a huge financial cost to the businessman who has to pay interest on his loans.”

Improving the quality and yet managing to reduce the cost of construction is the mantra for profitability, said the minister. Recounting his experience as PWD minister in the Maharashtra government, Gadkari revealed that, though not a civil engineer, he managed to reduce the cost of the Mumbai Pune Expressway and 55 flyovers. His mantra was simple: adopt the carrot and stick approach. 

Contractors who completed projects ahead of time would be awarded a bonus of 100,000 and those who missed had to pay a fine of Rs.150,000 lakh every day! As a consequence of the approach, the minister said that the elevated road corridor near the domestic airport at Santacruz in Mumbai was completed in 17 months against its scheduled time period of 3.5 years.

Taking a dig at those who oppose infra projects, the minister said everyone comes together only to say "stop the work" but none come together to say "let’s commence work". Taking potshots at the defence force for creating obstacles in land acquisition, the minister said, "I can pen a book  on the troubles I have faced to get the defence approval!” 

On how the ministry has also managed to control pollution in Delhi, Gadkari said, by creating ring roads, a lot of truck traffic going to other states such as Punjab, Haryana, Uttarakhand and Himachal Pradesh no longer have to enter the city.  

Re-emphasising that the hallmark of good management is increasing profitability by controlling costs and focusing on execution through time-bound decision making, Gadkari said that it would result in savings on interest costs and prevent cost escalation in projects. He added that NPCC, though it has bagged huge orders, will generate triple digit profits only on execution of its projects.

Citing how management should learn the art of getting things done, Gadkari shared an anecdote involving Reliance Industries, when Dhirubhai Ambani was at the helm. The country’s biggest private sector company had put in a Rs.36 billion bid for the Mumbai-Pune Expressway project. When he realised that RIL’s price was the lowest bid, Gadkari said he told the then CM that the cost was exaggerated and to give him an opportunity.

“I told the CM that I will build the road in record time, but he laughed and said, 'Who will believe you? What is your track-record?' I replied, 'Let me experiment',” said Gadkari. Much to the chagrin of Dhirubhai, Gadkari took on the challenge. With the state just sanctioning Rs.50 million, the minister needed Rs.5 billion but ended up raising Rs.11 billion from the market. “Instead of a cost of Rs.36 billion, the expressway was built at a cost of Rs.16.5 billion and the government ended up saving Rs.20 billion,” revealed Gadkari.

Regaling the audience with the workings of government departments, the minister said the finance department was more worried which flight the personnel involved in the project were taking, whether a mobile phone has to be given or not. “A lot of time is spent on unnecessary details in departments. Instead, the focus should be on whether the work is getting done and is being done profitably,” quipped Gadkari, adding that the 55 flyovers in Maharasthra were built for Rs.10 billion, resulting in savings of Rs.8 billion for the state exchequer.

Summing up, he said that neither finance nor technology is a constraint to growth. What is the need of the hour is appropriate leadership, diligent workers, and decision makers. In a lighter vein, Gadkari said that the sword is still hanging over NPCC’s head, and that he was not impressed by profits of Rs.300 million but would instead be proud if the PSU managed to clock Rs.100 billion turnover and Rs.7 billion to Rs.8 billion profit. “At least then I can tell the finance minister Arun Jaitley that look the bet has paid off. That now you don’t have to do anything with NPCC,” said Gadkari.