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Spotlight, By Rohit Chaturvedi

The subject of land acquisition assumes greater importance as corridors such as East Coast Economic corridor falls under the jurisdiction of many states.

Indian trade is set to get a boost with the development of 2500 KM East Coast Economic Corridor. The proposed corridor is planned to span entire coastline from Kolkata to the southern tip of India and the state of Tamil Nadu. The corridor will facilitate efficient movement of goods across the east coast in addition to providing more trade and shipping options for the highly industrialised Northern. The corridor will also provide a fillip to trade involving Central parts of the country.

The corridor is an important component of the present government’s plan in achieving the goal of increased share of manufacturing in the GDP. It is expected to provide a leap in the economic development of the Eastern Parts which are, in general, poorer than the western part of the country with some pockets being one of the poorest in the country.

The development of the corridor has recently received a shot in the arm with the envisaged support from the multilateral organisation Asian Development Bank (ADB). The ADB has approved $631 million in loans and grant to develop the first section of the East Coast Corridor. The 800 km section between Vishakapatnam and Chennai is envisaged to connect existing economic hubs and industrial clusters to create a mega trade and industrial cluster. The new infrastructure will be built in the industrial areas including and surrounding the four main clusters viz. - Visakhapatnam, Kakinada, Amaravati, and Yerpedu-Srikalahasti.

Economic Corridors are Engines for Growth

Development of economic corridors has been one of the widely adopted levers for developing a region or geographical area. Asian Development Bank defined economic corridor as network or connection between economic agents along a defined geography. The economic corridors, though usually are transport routes, have much wider impact. They not only provide efficient movement of goods and people but also spawn and stimulate social and economic growth to areas surrounding the corridors.

An economic corridor may be characterised by 3 main features. First, it can be seen as a strip or band around the arterial transport network. Second, it connects two or more nodes on a bilateral basis with specific benefits to the identified nodes. Lastly, focused development of physical infrastructure most pertinent for the identified geographical region are the bedrock for any economic corridor.

There are many case studies proving that an economic corridor can act as a significant economic driver provided it is implemented well. The positive externalities of such corridors may be maximised by suitable policy, regulatory and institutional framework.

Examples are galore that well implemented Economic Corridors have given a significant impetus to the economic development of the regions they are covering. For example, the East-West Economic Corridor (EWEC), which runs from Da Nang in Vietnam, via Laos and Thailand to Myanmar Sea in the Indian Ocean, has catalysed not only the economic development but also improved the social indicators of the geography around it. By some accounts, the salubrious effect of the corridor include improved living standards, better access to healthcare, education, markets and other public service facilities.

The success of economic corridors has spawned many such planned developments across continents including Africa, where multilaterals like African Development Bank are actively involved in conceptualising and developing economic corridor.

The corridors help in unleashing clustering forces which have been proven as key to develop ecosystems. A cluster not only enables physical cross movement but also facilitates speedy exchange of intangible elements important for economic development. It enables fast movement of ideas and best practices, and make the entire cluster better as a whole.

Realising the importance of the role of Economic Corridors policy makers in India also have planned many such initiatives such as Delhi Mumbai Industrial Corridor (DMIC), Bengaluru-Mumbai Corridor etc. Most of these projects, once implemented, are expected to give a fillip to Indian trade and manufacturing.

Federal Nature of India Calls for Effective Coordination and Structuring

Due to federal structure, states in India control many aspects important for a successful implementation of economic corridors. For example, the regulations regarding land are driven by respective states. Similarly, provision of electricity and water also are the state subjects.

The subject of land acquisition assumes greater importance as corridors such as East Coast Economic corridor falls under the jurisdiction of many states.

However, the previous experience from the development of such initiatives, especially Delhi Mumbai Industrial Corridor (DMIC)., offers lessons for the future. The learning curve from previous experiences is likely to enable favourable environment for similar developments in future and shorten the developmental cycles for these projects. In addition to the experiential learning, many regulatory and institutional improvements have been made during the development of previous projects. The most notable is Land Acquisition, Rehabilitation and Resettlement Act (LARR Act). It may be appreciated that earlier emphasis on one-size-fits–all approach has given way to embracing wider set of approaches in land acquisition process. Land being state subject has been recognised and the states may now promulgate their own laws for land acquisition in line with local realities utilising a single framework.

The learning from previous experiences is manifested in the approach adopted by the ADB. It may be noted that the ADB has shown interest only for the stretch covering a single state .i.e. Andhra Pradesh. To elaborate, the stretch selected by the ADB has obviated the need of coordination between different states and also rested the onus on single government which is seen as pro-development and pro-reform. Over and above, the state is expected to witness political stability during the development phase.

The approach emphasises both the problems faced by and solution to implement the projects of such magnitude especially in the context of India; it is important to adopt an intelligent program management approach. The smart approach will focus on structuring projects in a way to achieve global maxima. One such parameter is to clearly fix the accountability with least number of agencies for each project ideally such agency/agencies should either be a single state or entities under the jurisdiction of a single state.

Smart Program Management is the Key to Successful Implementation

It is inevitable that a program of this complexity and scale will require to be implemented through the package of interrelated projects. However, it is important that big picture in never lost during the process of implementation.

It may be noted that program management approach focuses on end goals in terms of desired output and timelines. This can be achieved by intelligent subdivision of tasks in the form of various projects. Each project is a largely a homogenous chunk of similar activities. For example projects may be categorised along the aspects of engineering, commercial (market and financial), legal & contractual, environmental and social. The projects may additionally be designed on the basis of jurisdictions.

The role of program management is two-fold. One, dividing the entire program into smart packages and two, to ensure the proper interfacing and feedback loops. The importance of effective interlinkage cannot be overemphasised since the development process is not unidirectional. Due to the iterative nature of the development process, proper information systems should be used.

The success of any program management work is dependent on robust planning. The big-picture road map offers a strategic way to implement the projects. The most important part of such a planning exercise included identification of critical paths. In simple words, critical paths are stream (sequential and interdependent) of activities which determine the timeline of overall program or a project. Managing the critical path is key to the success of any program or project.

In the context of the East Coast Economic corridor, the most important element of any critical path is the land acquisition. Land acquisition has proven to be difficult in India and especially more so in the eastern states. Therefore, the planning exercise should also include the planning for acquisition of most of the land parcel in the beginning. The planning may also structure innovative mechanism to enhance participation levels from local population. The mechanisms may include acquiring land on lease as much as possible. The leasing of land will enable redistribution and accrual of the benefits to the landowners.

Moreover, the coordination between multiple Ministries of the Government of India, and the participation of State Governments of West Bengal, Odisha, Andhra Pradesh and Tamil Nadu, should be ensured through formal arrangement.

On institutional front, an Apex Body that could be headed by a Prime Minister may convene regularly to ensure proper oversight on the progress. It should also enable facilitative environment to address critical policy and administrative issues during the developmental phase. The Apex Body should have senior most level representation from the concerned Central Ministries and the states.

In addition, nodal implementation agency (which should be a corporate entity) may be formed on the lines of Delhi Mumbai Industrial Corridor Development Corporation (DMICDC). The advantages of a corporate entity are well known with in-built transparency, visibility and accountability embedded in the structure. It may also be emphasised that such an entity should be managed and run by professionals. The experience of AADHAR also exemplifies the positive effect of professional management. The corporate entity will report to the Apex Authority (which may act as a Board of the corporate entity). Key responsibilities of the entity should include execution of various tasks under the guidance of the Board, arrange financing, and provide advisory services for successful project implementation.

A State-level Coordination Entity/Nodal Agency responsible for coordination between the corporate entity and various state government entities and the project implementing agencies/special purpose vehicles may also be formed.

Another level of institutional arrangement may involve formation of Project Specific Entities, such as Special Purpose Vehicles, for individual projects viz. airport, port, industrial area, road, power etc, to mobilise financial resources through appropriate consortia and undertake actual implementation, operation and maintenance.

The Way Forward

Global experiences suggest that Economic Corridors have been successful in catalysing the regional growths. These examples show that the proposed East Economic Corridor will likely have substantial multiplier effect on the economies of Eastern States. However, the key for such development will depend primarily (and perhaps solely) on the quality of implementation. A smart program management approach with the support from robust institutional mechanism is the key to success of the project.

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Diplomatist Magazine was launched in October of 1996 as the signature magazine of L.B. Associates (Pvt) Ltd, a contract publishing house based in Noida, a satellite town of New Delhi, India, the National Capital.

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