8 Flaws in the State’s Approach Will Make the Coastal Road One of the Greatest Financial Blunders
On 16th July 2019 the Bombay High Court blocked the Coastal Road (CR) Project, asking for new environmental clearances for the Rs14,000-crore 29.2 km long coastal road joining South Mumbai to Borivali in the North. It also quashed the Coastal Regulation Zone (CRZ) clearances granted to it.
The Court said that there is “serious lacuna” in the decision-making process and noted that the Municipal Corporation of Greater Mumbai (MCGM) should have obtained environmental clearance under Environmental Impact Assessment (EIA) notification issued by the Centre. The Court lamented that “…a proper scientific study has been overlooked by Maharashtra Coastal Zone Management Authority (MCZMA), the EIA and the Union Ministry of Environment and Forest (MoEF).”
Here are the major issues with the way the government went about planning the coastal road.
1. Shoddy Planning: A lot of concerned citizens who have had a look at the project concluded that the entire planning process (not only the environment part) for the CR has been shoddy.
The first and foremost requirement while planning any work is to establish the need for the work for which pre-feasibility and feasibility studies are essential. After the feasibility is established, a detailed project report (DPR) is prepared for obtaining a decision on investment for the execution of the project.
While establishing the feasibility, various alternatives are discussed to ascertain whether the same goals can be achieved by any other means and with fewer resources and cost. Clearances under the Environment Act, Wild Life Protection Act etc. come at a much later stage.
2. Fundamental Issues Ignored: The government did not get into basic questions such as, is there is a need for the CR? Aren’t there alterative and better solutions? Will a spending Rs14,000 crore actually reduce congestion? No rationale for the project was established, risks associated with the project have not been evaluated and no sensitivity analysis done. Here the independent variable is the actual traffic that will be diverted on to the CR.
A perusal of the Bombay High Court order dated 16 July 2019 shows in paragraph 165 that the only point other than “environment” that has been petitioned in the public interest litigations (PILs) is that of the metro being constructed parallel to the proposed CR. If pre-feasibility and feasibility had been done, the construction of the metro would have automatically figured in working out the traffic that would be diverted to the CR.
3. Need for the CR Not Established: Our study reveals that the authorities had already made up their minds to construct the CR and all studies were designed to support this decision. In actuality, the Detailed Project Report (DPR) has not established the need for the CR. It is not a question of “for” or “against” but “with” and “without” that has remained unanswered.
Further, it is not clear as to who are the real beneficiaries of the project. The CR will transport about 1.36 lakh cars i.e. not more 1.64 lakh passengers (taking average occupancy as 1.2 as per MCGM) on any given day. As opposed to this, the suburban rail corridors move more than 36 lakh passengers every day. Six car lanes in the CR are meant for car owners and only two for public transport. And despite this, the public is being made to finance the project.
4. Objectives Not Quantified: The objectives have not been quantified accurately e.g., the number and type of vehicles that will be diverted to the CR in a given period from the existing parallel roads. The objective of the CR as stated in the report: “This report presents studies carried out under the guidance of the Hon’ble Additional Municipal Commissioner (Eastern Suburb) to verify the feasibility of the proposed coastal road and recommendations for the detailed design stage of the project.”
This gives the game away. It is clear from the objectives that the DPR was meant to “verify (and not ascertain – emphasis mine) the feasibility of the CR and the detailed design.” The objective shows that the authorities had already made up their minds to construct the CR. This is the most unprofessional objective anyone can come across anywhere in a DPR.
5. Guidance from Unqualified “Experts”: Further, including the caveat -- “under the guidance of the Hon’ble Additional Commissioner” is ludicrous when bureaucrats lack the basic professional competence, qualifications, and experience to make a DPR for such an advanced and sophisticated project. Some of the other major indicators to show that the DPR was just a white wash to endorse a decision already taken are given below.
6. Errors in Working out Major Indicators: The Origin-Destination (OD) survey does not include the critical question of “willingness to use the road”. The consultant has safely assumed that all commuters would use the CR. In fact, the surveys have not been conducted strictly as per the Indian Roads Congress codes and mandates.
Inadequate sample size can lead to wrong conclusions. In this case, the DPR has omitted its mention. Speed & Delay (S&D) survey was done only on one corridor and the results of that corridor are not available in the DPR. Classified volume count i.e. the number of vehicles by types is given but its categorisation is not given. Only total number of vehicles is given.
Impact of Ganesh idols immersion on the tunnel both due to weight, change in soil conditions and social repercussions when certain beaches will not be available for immersion, have not been considered.
7. Contradictory Statements About Viability: In paragraph 15.9 “Conclusion from economic analysis and financial analysis”, it is stated: “From the economic analysis it may be concluded that, the construction of the proposed CR may be considered as economically viable” meaning that the CR project is profitable to the government, to the economy and would improve the welfare of the citizens.
However, paragraph 13.7 of the DPR shows a negative economic internal rate of return (IRR) at ( ̶ )2.55% with a meagre 1.47% as financial IRR. There is further confusion in the statement that follows in paragraph 15.9, “From the financial analysis results it may be concluded that the construction of the proposed Coastal Road is financially not viable on build, operate, transfer (BOT) basis.”
Even then, the DPR has concluded that the project is “economically viable” despite the economic IRR being negative and the project hardly sustainable financially at 1.47 % FIRR.
8. Misleading Statement: The DPR states on page 154 that NOC (No Objection Certificate) from the High Court is also required in reference to PIL 87 of 2006. This appears irrelevant because the final order dated 21 September 2006 in respect of PIL 87 of 2006 states, “We are afraid, the subject matter of the writ petition cannot be said to fall within the domain of public interest litigation. We dismiss the writ petition accordingly.” Do we need any further evidence to show that the whole DPR is fudged to enable the CR being made “under the guidance of the Hon’ble Additional Municipal Commissioner (Eastern Suburb)”?
Global experience shows that investments go waste when projects are undertaken without a DPR or the DPR is “fudged” or wrongly prepared. Nagrik Chetna Manch had filed a PIL about a flyover costing over Rs100 crore constructed in Pune with a fudged DPR. Instead of reducing the traffic congestion, the multi-storied flyover has added to the woes of the motorists and hardships of the pedestrians. A foot over bridge made without a DPR in Pune had to be demolished after a couple of years because of lack of its usage with its columns obstructing pedestrians.
We strongly recommend that concerned citizens and non-profit organisations should take up PILs on issues other than the “environment” because our experience shows that hardly any project fails the test of environment. The government can even change the legislation to accommodate its pet projects. Moreover, here we are talking of Rs14,000 crore! Do we want to see this enormous amount from our own pockets going down the Arabian Sea?
Maj Gen SCN Jatar (Retd) was chairman and managing director of Oil India and ONGC Videsh. He is working to bring transparency in governance and volunteers with Nagrik Chetna Manch, Pune