CWG fiasco may cost India $90 billion: report

The study is calculated on the basis of six sigma standard where India is down one level

trithesh

Trithesh Nandan | September 28, 2010



As India tries to salvage the Commonwealth Games from stained walls and other infrastructure inadequacies, a report suggests the mess might just cost India 90 billion dollars. With just five days left for the Games, the world now questions India on megaproject management capability, says the study done by Delhi based think tank – Imagindia Institute which is studying the image and geopolitics of India.

“The huge public spectacle of a large project gone wrong, may end up costing the Indian economy at least $90 billion dollars, or almost Rs. 400,000 crores, over the next three years,” the report said.

“Now a big question mark is on India’s capability to handle the large project management,” Robinder Sachdev, president of Imagindia Institute told Governance Now.

“This failure means that India has dropped at least one notch on the reality and perceptions about quality, and project management – among global and domestic players, he added.

The report added that it the Games are a classic case of project management failure. The loss was calculated on the basis of six sigma standard. The report mentioned, “It assumes that India has dropped one level, which means a negative impact of 0.02266 percent on the country’s GDP for the next three years.

“We have assumed a one sigma loss in India’s quality and project management assurance, and this translates to almost $90 billion over next three years,” Sachdev commented on how the loss due to CWG fiasco was factored in economic terms

Sachdev said that large scale business and investment decisions regarding India in board-rooms will certainly be impacted by government’s handling of the CWG, touted by the governement to be of Olympic proportions. “Because of all these factors, decision making could be influenced, and it has to have a economic cost for the country - it may hamper projects on infrastructure” he said.

Last week in a report, global rating agency Moody said that India’s image has been tarnished with all the extensive media reportage on the inadequate preparations for the Games. “Concerns regarding safety, security and site-preparedness are tarnishing the country’s global image...India’s reputation as a tourist and investment destination could be damaged," the report said.

However, Sachdev said tourism to India will not suffer that much. “We believe tourism will not suffer much, since tourists who visit India have mostly identified India with snake charmers, history and its dirt.

India can still come out of such embarrassing situation, Sachdev said. “The way out is that government and industry could take stock of situation as soon as the games are over.”

“India will need a new advertising campaign on the lines of ‘Incredible India’ focusing on business in India,” he said.

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