General Instructions on Procurement and Project Management

USHERING A NEW WAVE OF REFORMS IN PUBLIC PROCUREMENT AND PROJECT MANAGEMENT

INTRODUCTION

Cost and time overruns have long since plagued India’s infrastructure sector and given a bad name to public projects being executed in the country. According to a report[1] published by the Ministry of Statistics and Programme Implementation, as on November 1, 2021, 438 out of 1,681 central sector infrastructure projects have been affected by cost overruns, aggregating to Rs 4.34 lakh crore, and 539 projects are running behind their respective schedules. Such delays take a toll on the viability of projects. To mitigate this problem, the Central Vigilance Commission (“CVC”), Comptroller and Auditor General of India and NITI Aayog have long-advocated the need to revamp the procurement and project management procedures in India. The efforts of these premier institutions have culminated in the Ministry of Finance issuing the General Instructions on Procurement and Project Management on October 29, 2021 (“General Instructions”). By introducing provisions pertaining to additional methods of procurement, timely payment to contractors and reforms in the dispute resolution process, the General Instructions attempt to overhaul the manner in which projects are awarded and implemented by public authorities and project executing agencies (“PEA”).
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