Highways ( HN1) Department

Government of Tamil Nadu

Abstract

Tamil Nadu Road Sector Project - Institutional Development Study - Principles and Policy framework for strengthening Institutional and Financial capacities of Highways and Rural Works Department - Approved - Orders issued.

Read the following:

2. G.O.Ms.No.191, Highways (HN1) Deptt, dt. 23-7-1999

3. From the Project Director, Tamil Nadu Road Sector Project, Chennai - 25. Lr. No. 200/97/F, dt. 9-3-2001

G.O.Ms.No.141                               HW (HN1) Deptt.                                    Dt. 16.8.2001

The Tamil Nadu Road Sector Project (TNRSP) is an effort by Highways Department of Government of Tamil Nadu under the proposed World Bank loan to undertake improvements to 1280 KM of roads consisting of state Highways, Major District Roads and Other Districts Roads. To increase the quality of output and functional efficiency of the Department, modernization and capacity building initiatives are necessary as part of the on-going TNRSP.

The World Bank have extended Technical Assistance loan for project preparation for this purpose through the Department of Economic Affairs of Ministry of Finance, Government of India. The project preparation has been carried out under Phases I, IA and IB. The Project Coordinating Consultant M/s Kinhill Pty. Limited has carried out survey and investigation comprising Detailed Engineering, Socio economic survey and environmental aspects on selected roads of 750 Km and 12 bypasses of 80 Km.

As per the agreement with the bank, the TNRSP has to undertake an Institutional Development Study as an integral part of the project preparation. the objective of Institutional Development Study is to develop an Institutional Development Action Plan to improve the Technical and Financial capacity of Highways Department for effective and effective management of Tamil Nadu Road Transport Network and related infrastructure so as to meet the Transport demands of its users.

Based on the guidelines of World Bank, the consultant M/s Booz. Allen and Hamilton INC, was selected to carry out a five month study for Highways Department and a contract agreement was signed on ist April 1999. In the G.O. second read above the Government have constituted a steering committee consisting of the following officers to review the study report in respect of institutional development study.

                      1. Secretary to Government , Highways Department   - Chairman

                      2. Secretary to Government, Planning and Devt.         - Member

                      3. Additional Secretary, Finance Deptt.                      - Member

                      4. Project Director, Tamil Nadu Road Sector Project - Member

                      5. Chief Engineer (GL), Highways                               - Member Secretary.

The Institutional Development Study consultant had carried out the study, organized workshops and held progrssive consultations with the stakeholders and road users and submitted an inception report, Audit Report, Draft Final Report  and Final Report. The consultant has brought out in the study report, the present status of the Highways and Rural Works Department and the need for strengthening  and separation of various functions. According to the consultant, at present the Department is a single organization with mixed planning and implementation functions, inadequate funding mechanism and lack of operational autonomy. Such a situation needs to be corrected and improved so as to transform the department into a modern and dynamic organisation. It should have a statewide policy planning and quality assurance function and a number of independent road management units having autonomous functions and responsibility for implementation.

In his letter third read above, the Project Director, Tamil Nadu Road Sector Project has stated that the recommendations of the consultant on three occasions and the review comments were communicated to the consultant. The consultant submitted the final report incorporating the review comments by 15th September, 1999. The board recommendations in the Institutional Development Study report in the five focus areas have been accepted by the Steering Committee. they are:-

                                             a) Organisational Realignment,

                                             b) Financial Mechanism,

                                             c) Core process

                                             d) Information Systems, and 

                                             e) Regulatory Context.

The World Bank, as a part of their lending strategy for infrastructure projects, are keen that there should be adequate capacity building and Institutional Strengthening of the department implementing the project. This is necessary so as to sustain the grains of improved technology transfer achieved through consultancy services. For this purpose the Institutional Development Strategy - which is two part strategy - has to b e implemented during the Construction Phase, so as to complement each other. Towards this end, a number of concrete measures have already been intiated in this regard. Some of these are:

                1. Setting up of  Tamil Nadu Road Development Company - a joint venture company of TIDCO and   

                    IL&FS - for Development of roads on commercial format.

               2. Enactment of the Highway Act 2001

               3. Establishment of policy for a Road Fund Board.

               4. Maintenance of certain roads by private agencies.

The Project Director, Tamil Nadu Road Sector Project has therefore furnished proposals for acceptance of principles and policy framework for Institutional Development of the Department. This will facilitate further reveiw during the implementation of the recommendation on case by case basis, to coincide with the execution phase of Tamil Nadu Road Sector Project and requested orders of Government in-principle, in this regard.

The Government have carefully examined the proposal of the  Project Director, Tamil Nadu Road Sector Project and decided to accept the board recommendations in the Institutional Development study report covering the five focus areas. The government accordingly accord approval in-principle to the recommendations in the Institutional Development Study in respect of five focus areas viz. Organizational Realignment, Financial Mechanism, core Process, information Systems and Regulatory Systems and Regulatory context. further necessary relevant orders in respect of components withion each focus area will be issued separately.