Is CPWD Going to be Corporatised? Recent Developments and Future Prospects

The discussion surrounding the corporatisation of the Central Public Works Department (CPWD) in India has been a topic of interest in recent years. As of my last update in August 2023, there were ongoing discussions and considerations being made by the government to potentially transform CPWD into a Public Sector Undertaking (PSU). Comparison has been drawn to the corporatisation process of the National Buildings Construction Corporation (NBCC).

Government Reforms and Current Stand

Government reforms aimed at improving efficiency and accountability in public sector undertakings have been a significant focus. However, specific plans for turning CPWD into a PSU had not been finalised at that time. The process of corporatisation typically involves transitioning a government department into a company structure, which can enhance operational flexibility and financial autonomy.

As of 2023, the Indian government had decided against the corporatisation of CPWD, instead accepting the recommendations made by Ernst and Young (EY) in their report. This report suggested various measures to improve efficiency within CPWD, including:
1. Outsourcing maintenance functions.
2. Reducing the hierarchical structure.
3. Dividing projects into large, medium, and small categories.

Revisions and Structural Changes

The discussion on restructuring CPWD for improved efficiency is ongoing. The proposed outcomes may include the following:

CPWD may remain as is, with the recommendation made by the Group of Secretaries (GoS) to corporatize the department deemed unjustified. According to this view, CPWD is an efficient department and it is performing to the best of its capacity under the given resources. Alternatively, CPWD could be transformed into a board structure similar to the railways and other boards. In this scenario, different units would operate independently and report to an IAS officer at the top. If the department is corporatised, like in the case of BSNL, all current employees would have the option to either remain in the existing cadre or join the new PSU.

Given the current economic landscape and burden on the Common Financial Institutions (CFIs), there is a possibility that CPWD may be corporatised in the future. However, the decision remains uncertain and may change based on new developments and government policies.

Impact on Employees

While the medium-term prospects for CPWD are uncertain, the employees face a crucial decision if the department is corporatised. Current employees would have the choice to either stay in the parent cadre or transition to the new PSU structure. This decision can significantly impact their career paths and benefits.

Conclusion

The future of CPWD is still uncertain, but the government’s recommendations imply a focus on internal restructuring and efficiency improvements. For current employees, the decision on whether to corporatise will depend on the final government policies and the specific benefits offered in the new structure.