Project Management Case Study

The Delhi Metro Project: Effective Project Management in the

Indian Public Sector

Abstract
The Delhi Metro project gave Delhi a world-class mass rapid transit system. More
importantly, it stood out from most other public sector projects in India in that it
was completed on schedule and within the budgeted cost.

The case describes the organization and planning of the project and highlights the
steps taken by the DMRC to ensure the successful completion of the project. It also
explains how the DMRC managed the various stakeholders like the central and state
governments, the contractors, and the citizens of Delhi, to ensure that the project
was implemented smoothly. The case ends with a brief discussion on the future
plans of the DMRC.

Issues
 Understand the preliminary activities to be taken up before a large infrastructure
project can be started
 Appreciate the significance of the role of a project manager in project execution
 Understand the importance of the right work culture in successful project
management
 Recognize the importance of managing the various stakeholders in a project
 Appreciate the difficulties involved in the execution of large infrastructure projects in
developing countries, and how these can be overcome

Introduction
With a 6.5 km section of Line 3 becoming operational in April 2006, Phase I of the
Delhi Metro project was nearing completion. Of the total length of 65.16 km of the
first phase, 62 km had been completed and opened for service. This phase was set
to cost Rs. 98 billion. As of early 2006, around 450,000 passengers were traveling
by the Delhi Metro every day.

The Delhi Metro was meant to solve Delhi's traffic problems, which had become
almost unmanageable. The first steps to build a metro system in the city were taken
in the early 1990s. In 1995, the Government of India (GoI) and the Government of
the National Capital Territory of Delhi (GNCTD) formed the Delhi Metro Rail
Corporation Ltd (DMRC) under the Companies Act to construct the Delhi Metro.

Conceived as a social sector project, a significant portion of the project cost was
funded through a soft loan provided by the Japanese government through Japan
Bank International Corporation (JBIC). The rest was contributed by GoI and GNCTD
through equity.
E.Sreedharan (Sreedharan) was appointed managing director (MD) of the DMRC and
project manager for Phase I of the project in November 1997. Work on Line 1 of
Phase I started in October 1998. DMRC formed consortiums to advise it on the
project and to provide it with the latest technology. It also saw to it that the foreign
companies worked with the Indian companies to ensure that the latter assimilated
their expertise and technological know-how.

The DMRC faced any number of technical and systemic challenges during the
construction of the metro.

However, thanks to thorough planning, an effective project design, and a 'we-mean

business' culture, it was able to overcome all these hurdles. The organizational
culture was based on punctuality, honesty, and a strict adherence to deadlines. The
DMRC successfully managed the various stakeholders in the project like the general
public, government bodies, etc., and also ensured that the project was
environmentally safe.

With Phase I of the Delhi Metro project nearing completion, the GoI decided to
extend the metro network and work on Phase II of the Delhi Metro project was set
to commence in September 2006.

In the process of implementing the project, the DMRC had gained a lot of
technological expertise, which would be used by other cities in India and abroad to
build metro systems similar to the Delhi Metro.

Background Note
Metro systems were generally considered as a transport option when the population
of a city crossed the 1 million mark. Delhi crossed that milestone as early as in the
1940s.

The 1950s saw a doubling of the city's population; with that, the vehicular traffic
also soared. By the early 1990s, Delhi had more registered vehicles than Mumbai,
Kolkata, and Chennai put together.

It had become one of the most polluted cities in the world, with automobiles
contributing to more than two thirds of the total atmospheric pollution. There was an
urgent need felt at this point to improve both the quality and availability of mass
transport services in Delhi.

The first ever traffic study of Delhi (titled the 'Origin - Destination Survey of Traffic
of Greater Delhi') was carried out by the Central Road Research Institute (CRRI) in
1957. As many as 35 more studies on Delhi's transport problems were conducted
subsequently by various entities (Refer Exhibit II for some of these studies). Almost
all these studies recommended the Mass Rapid Transit System (MRTS) as a means
to solve Delhi's traffic problems.

In 1989, the GNCTD, with support from the GoI, commissioned a feasibility study for
developing an MRTS for Delhi. The study was undertaken by Rail India Technical &
Economic Services Ltd. (RITES) and completed in 1991...
Excerpts

The Delhi Metro Project

n order to implement the Delhi Metro project, the GoI and the GNCTD set up a
50:50 joint venture company called the Delhi Metro Rail Corporation Ltd. (DMRC).
The company was incorporated under the Companies Act in May 1995. The DMRC
was to complete Phase I of the project within 10 years, i.e., by the end of 2005...

Funding the Project

Globally, most urban MRTS projects were financially unviable because the fares
could not be fixed solely on a commercial basis. If the fares were fixed too high, the
passenger numbers would remain low, thereby defeating the very purpose of setting
up the system. Therefore, the concerned governments generally bore the capital
costs of an MRTS system. In the case of the Delhi Metro project too, the GoI and the
GNCTD bore the capital costs. The total cost of the first phase of the project was
initially estimated at Rs. 60 billion, at April 1996 prices. Later in 2002, with the cost
of the project rising by approximately 10% per year, the estimate was revised to Rs.
89.27 billion...

The Project Team

With the funding for the project being finalized, the next step was to constitute a
project team. Sreedharan was appointed as project manager and managing director
of the DMRC in November 1997. A technocrat, he had had a long stint in the Indian
Railways (IR) and had retired in 1990. During his service with IR, he had earned a
reputation for completing major projects on time and within the budget...

Planning the Project

In India, major infrastructure projects are often stalled because of a lack of funds,
political interference, lack of professionalism and accountability, property disputes,
corruption, etc. Therefore, even before the commencement of the project, the DMRC
attempted to put in place effective systems to ensure the smooth progress of the
project.

Funding was not an issue in the case of the Delhi Metro project because it was
settled even before the project commenced. In order to steer clear of political
interference, the DMRC sought autonomy on all major matters and the GoI promised
to give it this autonomy. "Financial powers were vested in the managing director.
Also, the managing director was the last authority on tenders," said Anuj Dayal
(Dayal), chief public relations officer, DMRC...

Project Implementation
Construction work on the project commenced on October 1, 1998. The entire project
was divided into three lines. Further, these lines were divided into sections.
Line 1 (Shahdara to Rithala)
The work on Phase I commenced with the Shahdara-Tis Hazari section of Line 1,
covering a distance of about eight kilometers. The work involved utility diversions,
barricading, and actual civil construction. A major part of this section was on
elevated tracks. All tracks in the elevated corridor were laid on concrete
(ballastless). The tracks were supported on single piers...

Managing the Stakeholders in the Project

Effective project management involved not only completing the project on schedule
and within the budget, but also managing the project's stakeholders. The
stakeholders included the governments, the contractors, the funding agencies, and
the general public. Despite assurances that the DMRC would enjoy autonomy, it
faced political pressure not only in its recruitment processes, promotions, and
contract awarding but also in land acquisition...

Project Evaluation
The successful completion of the project effectively silenced the critics who had been
skeptical about the ability of an Indian public sector organization to complete any
project, let alone one as complex and costly as the Delhi Metro, on time and within
the budget...

Outlook
The Delhi Metro was expected to play a major role in relieving the transport
problems faced by the city's residents. Moreover, with the GoI planning extensions
to the Metro, it appeared that the benefits of an efficient transport system would be
enjoyed by people living in a wider geographical area than originally planned. The
GoI and the GNTCD had prepared a comprehensive plan to extend the Delhi Metro to
244 km by 2021 in three subsequent phases (Refer Exhibit VI for more information
about the Delhi Metro project by 2021)....

GMR's Terminal 3 for Delhi Airport: A Successful Project

Execution Model for Public-Private Partnership Initiatives?

Abstract
This case study discusses the infrastructure deficit in India and how the country was
trying to overcome this problem with the help of the Public Private Partnership (PPP)
model. The case details the 'Terminal 3 for Delhi Airport' project to explain the role
and importance of PPP in overcoming infrastructure deficit. It also explains the
 different features of Terminal 3 (T3) which go to make it a world class airport
terminal. In the end, the case study covers the limitations of the PPP model. The
case study helps to understand the role of PPP and provides scope for discussions on
how to overcome the limitations of PPP. It also provides ample scope for discussing
how T3 was completed in just 37 months and what the upcoming infrastructure
projects can learn from this project. This case is meant for MBA/MS students as a
part of their Project Management curriculum.

Issues
 Understand the importance of Public-Private Partnership initiatives, especially in
emerging markets, to bridge the 'infrastructure deficit
 Understand the salient features of Delhi Airport's Terminal 3 (T3) project and
analyze all the features that have contributed to the completion of T3 project in a
record 37 months
 Discuss and debate what T3's record completion in 37 months means for PPP
initiatives and what best practices this project execution offers for future PPP
initiatives in the infrastructure sector

Contents
Introduction
About GMR Group
Infrastructure In India: Caught Between Development & Growth
PPPS in India's Infrastructure Development
GMR's T3 & Dial
The Limiting Factors
Exhibits

Introduction
On July 14, 2010, the first flight touched down at India's newly built Terminal 3 (T3)
of Delhi airport, the swankiest and largest in the country, opening a new chapter in
the history of the airport and the Indian Aviation Industry. It was around 4:40 pm
(IST) when the first commercial flight, the Air India flight from John F Kennedy
International Airport, New York, touched down on the runway to be greeted by
water cannon salutes from both sides. The 220 passengers and 18 crew members of
AI-102 flight were warmly welcomed by the airport senior officers and staff and
treated as special guests. They posed for media cameras and received gifts and
certificates for being the first group of passengers to arrive at T3. Sunil Gupta
(Gupta), Director of an IT firm in New York, who was among the first passengers,
said, "The old terminal was shabby and barely had basic facilities. This one looks
good and is up to international standards".

Not too long ago, Delhi airport had been known for its poor management and poor
passenger services. Underinvestment in airport infrastructure since independence
was a major cause for concern. Lack of funds and the expertise to develop and
maintain the growing airport infrastructure needs of the country forced the
government to invite private players to participate in infrastructure development
under Public Private Partnership (PPP). It was in January 2006, that a consortium led
by the GMR Group won the bid to develop the airport. Very soon, the PPP initiative
yielded results, with two terminals being renovated6 and one new runway and
terminal 1D being opened up for commercial operation. However, revolutionary
change, as the experts called it, came about when the T3 was inaugurated on July 3,
2010. At the inauguration of T3, Manmohan Singh (Singh), Prime Minister of India,
said, "The Delhi airport has improved its rank sharply in terms of Air Service Quality
(ASQ) performance, from 101 in 2007 to 21 in 2010. After the opening of this new
terminal we are hopeful that the airport will shortly rank within the first 10 airports
of the world."...

About GMR Group

GMR Group (GMR), a Bengaluru, India-based leading Infrastructure group, had a
stake in almost all types of infrastructure development activities including power,
road, airport, and Urban Infrastructure. GMR was one of the first companies in India
to take the initiative in infrastructure projects when they were thrown open to the
private sector in the 1990s...

Excerpts

Infrastructure In India: Caught Between Development &

Growth
India, the world's second fastest growing economy, grew at the rate of 7.4% in the
financial year 2009-10 . According to Singh, this was far better than the growth rate
of developed countries and...

PPPS in India's Infrastructure Development

Public Private Partnership (PPP) was a positive and sustainable solution to overcome
infrastructure deficit, analysts said. The PPP model aimed at shifting the
responsibility for financing, development...

GMR's T3 & Dial

Analysts cited GMR's T3 terminal as one of the successful PPP initiatives which had
been completed significantly before the scheduled time. On the occasion of its grand
opening...

The Limiting Factors

Experts stated that T3 would serve as an example for upcoming infrastructure
projects. However, a few critics stated that the PPP model only provided profits to
the private players through deals...
UIDAI's Aadhaar Project: Challenges Ahead

Abstract
The case focuses on the Aadhaar project that was initiated by the United Progressive
Alliance (UPA), a coalition of central-political left parties heading the Government of
India (GoI), under the guidance of Prime Minister of India, Manmohan Singh
(Singh), to provide identity to the 1.2 billion citizens of India. The project aimed to
plug loopholes in welfare programs where checking leakages and identifying
beneficiaries was a major challenge. With an Aadhaar, there was an absolute
guarantee that no two people would have the same Aadhaar, and it could not be
duplicated either.

Aadhaar previously called as the Unique identification (UID) project was the 12 digit
identification number provided by the Unique Identification Authority of India
(UIDAI) on behalf of the GoI. The number served as proof of address and identity
for citizens anywhere in India. In June 2009, Nandan Nilekani (Nilekani), former CEO
of Infosys Technologies Limited was invited by Singh to head the Aadhaar project
and was roped in with the rank of a union cabinet minister as the Chairperson of the
UIDAI. In September 2010, the Aadhaar project was launched by Singh and UPA
Chairperson, Sonia Gandhi (Gandhi) in Tembhali village in Maharashtra. The launch
signified UIDAI's core initiative of giving the poor and marginalized in India an easily
verifiable and mobile identity. Having invited Nilekani, Singh had given him full
autonomy during the implementation of the Aadhaar project. Nilekani was also given
a free hand by Singh to recruit good talent and form his core team. Nilekani initiated
the Aadhaar project by launching a pilot project in Karnataka, in October 2010. The
success of the pilot project prompted the UIDAI to roll out the Aadhaar project in
other states of India.

Since the initiation of the Aadhaar, Nilekani received opposition from several
quarters - mainly from cabinet colleagues, bureaucrats, policy experts, activists, and
a few state governments. The Finance Ministry of India opposed that the Aadhaar
would result in duplication of expenditure since the National Population Register
(NPR) led by the Home Ministry was also responsible for making a comprehensive
identity database. The Home Ministry questioned the security of biometrics and
expressed concerns over how the confidential data would be protected. The Planning
Commission said that the UIDAI structure was against government procedures. On
the positive side, some policy makers felt that Singh's decision to recruit Nilekani
proved to be appropriate since Nilekani had retained immense goodwill amongst the
stakeholders involved. Moreover, the autonomy given to Nilekani by Singh led him
to prove the viability of the project.

The divided views over the Aadhaar project raised doubts whether the project would
be trashed and Nilekani would step down from the post of the Chairman of the
UIDAI. The debate over duplication of data and security concerns raised by the
Home Ministry came to an end after Singh intervened. In January 2012, Singh in a
meeting with Planning Commission Chairman, Montek Singh Ahluwalia (Ahluwalia),
Home Minister, P Chidambaram, and Nilekani concluded that the Aadhaar would be
 given an extended mandate of collecting biometric data of another 400 million
residents in India. While the UIDAI was instructed to enroll 600 million residents
across 16 states and Union Territories, the remaining 600 million residents would be
recorded by the Registrar General as part of the NPR. The NPR and the UIDAI would
then share the biometric data and de-duplicate the data to form a comprehensive
biometric database. Nilekani's performance in successfully steering this challenging
project was being keenly watched as it was one of the rare instances where the
Government had entrusted a project of this magnitude to a corporate leader. Having
achieved the initial breakthrough and scored early successes it was to be seen how
he would overcome the new challenges and scale up the project.

Issues
 Analyze the efforts by UPA and Singh in launching the Aadhaar project
 Understand the initiatives undertaken by Nilekani in launching the Aadhaar project
and making it a success
 Understand the issues and challenges faced by Nilekani during the implementation
of the Aadhaar project
 Understand the dilemma faced by the GoI in taking the Aadhaar project forward

Introduction
On February 7, 2012, Nandan Nilekani (Nilekani), former Chief Executive Officer
(CEO) of India-based technology company, Infosys Technologies Limited and
Chairperson of the Unique Identification Authority of India (UIDAI), announced that
the UIDAI would refresh its data collection process by including the best finger
printing technology and by introducing the multiple-try method in the second phase
of Aadhaar enrolment in April 2012. Aadhaar, previously called the Unique
Identification (UID) project, was the 12-digit identification number provided by the
UIDAI on behalf of the Government of India (GoI).

The number served as proof of address and identity for citizens anywhere in India.
The Aadhaar project was initiated by the United Progressive Alliance (UPA) under the
guidance of Manmohan Singh (Singh), Prime Minister (PM) of India and member of
the UPA, to provide an identity to the 1.2 billion citizens of India. The project aimed
to plug loopholes in welfare programs where checking leakages and identifying
beneficiaries was a major challenge. There was an absolute guarantee that no two
people would have the same Aadhaar, according to the UIDAI. Besides, it could not
be duplicated either. Thus on January 28, 2009, the UIDAI was constituted under
the aegis of the Planning Commission. Subsequently in June 2009, Nilekani was
invited by Singh to head the Aadhaar project and was given the rank of a union
cabinet minister as Chairperson of the UIDAI. After being appointed UIDAI
Chairman, Nilekani said, "The Government has come to the conclusion that this
project is strategic and worth it. I have been invited to lead this project. I believe
that it is viable and I will do my best to make it viable.

In September 2010, the Aadhaar project was launched by Singh and UPA
Chairperson, Sonia Gandhi (Gandhi), in Tembhali village in Maharashtra. The launch
signified UIDAI's core initiative of giving the poor and marginalized in India an easily
verifiable and mobile identity. It was reported that the poor usually migrated in
search of work from their villages and faced problems regarding their identity. The
Aadhaar number was expected to give the villagers their first mobile identification.
Gandhi emphasized the importance of Aadhaar in the context of India's increasingly
mobile population and in fulfilling GoI's commitment to inclusive growth. Since the
top people of the GoI were involved in the project, the Aadhaar project was
accorded a VIP status.

Having invited Nilekani, Singh gave him full autonomy during the implementation of
the Aadhaar project. Nilekani was given a free hand to recruit good talent and
implement the project without the monitoring of the Planning Commission. For the
FY 2009-2010, the UIDAI was given a budget of US$ 22 million for implementing the
first phase of the Aadhaar project covering 200 million residents of India...

About UIDAI
The Unique Identification (UID) project was first initiated by the Planning
Commission with the stated aim of providing identification to each resident of India.
This was also to be used to a major extent as a basis to ensure the efficient delivery
of welfare services.

It also sought to monitor various schemes and programs of the Government of India
(GoI). The UID concept was discussed in 2006 when the Department of Information
Technology (DoIT) and Ministry of Communications and Information Technology
gave administrative approval for the project...

Excerpts

Nandan Nilekani Steps In

The UPA government aimed to get the most influential minds to work on the national
identity card project. Thus in June 2009, Singh invited Nilekani to be in charge of
this initiative. Singh offered him the post of the chairman of the UIDAI. He was also
given the rank of a union cabinet minister. According to officials, the cabinet
minister post was offered to Nilekani since it carried special powers that would grant
him special independence during the implementation of the project...

The Pilot Project

In October 2010, the UIDAI launched the pilot project in Karnataka. Commenting on
the launch, M N Vidyashankar, Principal Secretary to the Departments of Information
Technology, Biotechnology, Science and Technology, and e-Governance, in
Karnataka, said, "Karnataka will be the first state in the country wherein the multi-
purpose ID numbers will be rolled out. The entire state will be covered under the
pilot project."...

Why is Aadhaar Necessary?

Nilekani in his book, Imagining India, mentioned that the Indians had a multitude of
ID cards. They could have all or some of these: a passport ID, a ration card, a
permanent account number (PAN) if they paid taxes, and a voter ID card when
registering to vote in elections. The databases having these identity proofs were
located in disconnected silos which made it difficult for anyone to zero in on a
definite identity for each citizen...

The Criticims
The Aadhaar project, however, had faced criticisms since its inception. The
parliamentary Standing Committee had questioned the very necessity of such a
project since the NPR was already in place to collect the biometric details of the
citizens. The Home Ministry raised similar objections over UIDAI collecting biometric
data when its own NPR could do equally well and added that Aadhaar would only
duplicate the data and increase expenses...

The Road Ahead

Despite facing several problems, Nilekani was poised to reach UIDAI's target of
covering 200 million citizens by March 2012. According to deputy director of
Technology, UIDAI, Ashok Dalwai, "Once we have achieved this, we would be the
world's largest bio metric identification system in the world." It was reported that in
a span of one and a half years, Aadhaar had equaled the size of the world's largest
biometric database that was in the US...