Projects to be implemented on EPC basis

The Centre has said projects would be implemented on Engineering-Procurement-Construction (EPC) basis, to the extent possible to reduce construction risks of time and cost overall.

The Union Cabinet whie giving formal approval to PM-DevINE, which was announced in the Union Budget 2022-23 to address development gaps in the North Eastern Region (NER) said to limit construction risks of time and cost overrun, falling on the Government, projects would be implemented on Engineering-Procurement-Construction (EPC) basis, to the extent possible.

Project delays in North east is nothing new due to many reasons leading to cost over runs.

In the construction industry, EPC is an acronym that stands for Engineering Procurement Construction. EPC is a type of project delivery model (or contract agreement) where contractors are responsible for the project from start to finish. In other words, engineering procurement construction contractors manage the project from initial design and engineering plans all the way through construction and completion of the finished product.

It said PM-DevINE is an additionality to the quantum of resources available for the development of the NER and will not be a substitute for existing Central and State Schemes.

The objectives of PM-DevINE are to: (a) Fund infrastructure convergently, in the spirit of PM GatiShakti; (b) Support social development projects based on felt needs of the NER; (c) Enable livelihood activities for youth and women; (d) Fill the development gaps in various sectors.

While some of the projects to be approved for 2022-23 under PM-DevINE are part of the Budget announcement, projects with substantial socio-economic impact or sustainable livelihood opportunities for the general public (e.g., basic infrastructure in all Primary Health Care Centers, comprehensive facilities in Government Primary and Secondary Schools, etc) may be considered in the future.

The Centre said the justification for announcement of PM-DevINE is that the parameters of NE States in respect of Basic Minimum Services (BMS) are well below the national average and there are critical development gaps as per the NER District Sustainable Development Goal (SDG) Index 2021-22 prepared by NITI Aayog, UNDP and MDoNER. The new Scheme, PM-DevINE was announced to address these BMS shortfalls and development gaps.

The Expenditure Finance Committee (EFC) Meeting, chaired by Union Finance Secretary, has appraised and recommended the PMDevINE Scheme with 100% Central funding, with an outlay of Rs. 6,600 crore for the 4 year period from 2022-23 to 2025-26 (remaining years of 15th Finance Commission period).

Efforts will be made to complete the PM-DevINE projects by 2025-26 so that there are no committed liabilities beyond this year. This implies front-loading of the sanctions under the Scheme in 2022-23 and 2023-24 primarily. While expenditure would continue to be incurred during 2024-25 and 2025-26, focused attention will be given to complete the sanctioned PM-DevINE projects.

The scheme will lead to creation of infrastructure, support industries, social development projects and create livelihood activities for youth and women, thus leading to employment generation.

The scheme will be implemented by Ministry of DoNER through North Eastern Council or Central Ministries/ agencies. Measures would be taken to ensure adequate operation and maintenance of the projects sanctioned under PMDevINE so that they are sustainable.

There are other MDoNER Schemes for the development of North Eastern Region. The average size of projects under other MDoNER Schemes is about Rs.12 crore only. PM-DevINE will provide support to infrastructure and social development projects which may be larger in size and will also provide an end–to-end development solution instead of isolated projects. It will be ensured that there is no duplication of project support under PM-DevINE with any of the other schemes of MDoNER or those of any other Ministry/ Department.

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