Managing Local Issues In Project Management


Locals – a nuisance or a national asset?







By J. Sridhar



In setting up any large project, a constant worrisome factor is the unpredictable reaction of the locals. By “locals” I refer to those who have - in some form - power or influence in the smooth conduct of the project. They are mostly those whose land or occupation is likely to be affected by the project being set up in their zone. How they react can determine the fate of the project. Unless they are highly influenced by rotten local politics or overzealous and opinionated NGOs, it is a challenge that can be handled through proper study and planning.


A mature, long term and value based approach is required in handling this issue. While the law provides for appropriate compensation and procedure, it is always inevitable that there would be emotional tremors that have to be tackled with great wisdom and foresight. An innocent blunder could cause major upheavals resulting in great costs and delay to the project. Project Promoters should therefore invest as much quality time and attention in this aspect as they do in the techno commercial features.


What are the “locals’” worries?


The first and foremost is their natural fear of insecurity and survival. The farm owner is anxious: “How will I earn from my farm if it is destroyed in the project?”  The laborer is worried: “Who will give me work if the farm owner gives away his land to the project and closes his farming activity?”


The second worry is about the quantum of compensation. Most believe that the compensation rates provided by the government would be woefully inadequate and insufficient for their long term survival. Hence, they react aggressively hoping to scoop away a larger compensation.


The third worry is about the sustainability of the compensation. How long will this one time compensation last? How do I live once this fund is exhausted?


The fourth worry is about the credibility of the promoters. Most promoters are business giants with clout and power at their disposal. “What if the project owners refuse to release the compensation and forcefully drive us out of our base? Where will we go then?”


For a neutral observer, all the above fears seem reasonable and well founded. Industrial history is replete with examples of exploitation by both sides to the detriment of the country’s progress. It is thus extremely important that promoters design their policy with great caution and after in depth studies.


Often, with the burning pressure for speedy completion of the project, funding worries and shortage of capable professionals, the issue of locals takes a back seat. This will prove a costly proposition.


When confronted with local pressure for the first time, the project head generally falls prey to the temptation of providing employment as a means of compensation. Nothing could be a greater trap than this. A project needs persons with specialized skills to build the project. Thereafter, the company needs people with skills appropriate to run the project. It is unlikely that locals would meet either requirement. Hence, merely recruiting them and letting them just loaf around the project is a slow and dreadful organizational poison. Under pressure, the company will also have to often guarantee long term employment thus getting unwittingly saddled with a huge long term overhead that is unlikely to be productive. Apart from the cost, imagine the negative impact it would have on other productive professionals employed to run the project.


So, how then do we lick this problem?


There is no easy answer. But, we must look at different options and hopefully, they will work.


1.           Through a well designed, subtle and timely campaign, great effort must be put in to build a clear image of the promoters. It should establish the promoters as strong, firm, fair, generous and powerful.

2.           The Management should set clear policy guidelines to the project head on its compensation policy. This should be based on sound values and principles. Any policy that is based on fairness and ethical principles is  surer to succeed than one based on situational convenience. It will also give the project head the courage and conviction to tackle tough, unscrupulous nuts trying to exploit the situation. Compensation patterns should be consistent and defendable. The team handling this should also be strong with proven integrity and professionalism.

3.           Since the project is a permanent addition to the local community, sincere steps should be taken towards welfare of the community. Improving their standard of life and helping them in a visible manner to become more productive will go a long way in ensuring peace with locals.

4.           Almost every project site will be found wanting in two important areas – education and health. The Project can help by setting up a good hospital and improve its performance by frequent visits of specialists and organizing special medical camps.

5.           The Project should also consider investment in an educational establishment that provides quality education at all levels. From basic schooling to professional education, from simple vocational skills to hi-tech knowledge and training. If a quality institution is built, it will attract students from all over the country and make it financially self sustaining. Through scholarships, locals could be encouraged to study and develop their future. This will erase the anxiety of uncertainty in the minds of the local families. It will also genuinely help locals find new avenues of income and growth. A limited number of them may even be suitable for genuine employment in the project.

6.           The Project should have an active Team which guides and counsels locals on financial investments and savings instruments. By educating them on this, the locals will learn not to fritter away their compensation money and conserve it for their long term benefit.

7.           An attempt should be made to help locals develop entrepreneurial skills to set up their own tiny or small scale businesses. Through collaborative support from micro finance organizations, NGOs and ITIs, an Entrepreneur Development Institute can be established to make locals independent, confident and equipped to earn and live on their own.


None of the above is simple or easy. It needs tremendous will power, corporate character and a high degree of competence at all levels. But, in the end, the benefits would far outweigh the costs.