Interview

Indian Construction Industry: "Future is really exciting"

Priya Ranjan Swarup, Director General

Construction Industry Development Council (CIDC)

India’s construction industry though of gigantic proportions is at cross-roads. Priya Ranjan Swarup, Director General of Construction Industry Development Council shared his moments of joy and frustration with Dr. Ranjit Singh, indicating that lot of ground is yet to be covered to assimilate quality and innovative culture - producing something of which every Indian could be proud of

Comments on the challenge of reconstruction in the aftermath of the Gujarat earthquake on 26th January 2001.

The challenge is three-fold: First, there is little timely institutional support to mitigate the agony that such disasters cause. Second, the flow of funding, resources and trained manpower is needed in such trying situations; and third, little technology back-up available for reinstatement of facilities which are damaged, or collapsed partially-alive, partially-dead structures, as against constructing from scratch.

Demolition experts are in demand; back-up from the state in the form of legal and administrative support are needed.

Roadblocks and potholes in the passage of the Indian construction industry.

Oh, there are plenty, chiefly amongst them are:

i) Lack of HRD initiatives;
ii) Lack of systems for institutional financing ,
iii) Lack of unified regulatory framework. In absence of these, the Indian construction industry will remain a low value-added goal-bound activity as compared to an efficient vibrant economic activity.

How has India’s construction industry fared in the recent past?

The industry is not sufficiently mechanised — employing 32 million workers, who are part-time agrarian workers with primitive skill-sets. In spite of its mammoth market-size of Rs. 220,000 crores for the year 2000-01, analysis of the data shows that taking into account the inflation, the industry is operating by-and-large on a plateau. Both quality and efficiency-wise, we’ve not done very well as compared to other world markets.

How is this industry poised to face the challenge of the current economic slowdown?

I would rather say that we are facing economic slowdown as this industry is in bad shape. The State is seriously contemplating that some kind of fillip to the activities is necessary. But unfortunately, we find a sectoral bias: sometimes, it is housing, sometimes it’s roads and so on instead of a well-thought out strategy. This means capacities in other sectors are neglected.

Various sectors in the construction industry have exclusive technology, exclusive people, exclusive experience, and exclusive equipment: e.g. you can’t put people working in the power sector in the highways projects. Thus, a nationwide dialogue is needed to initiate balanced growth, where the deviation will be tamed and controlled, or the industry per se will face lot of problems.

What are some of the future opportunities in the wake of the second phase of the economic reforms?

Future is really exciting. Due to opening up of the markets, the industry can have the association with technologically advanced entities, adding lot of value. Companies will be able to look beyond the frontiers of the nation entering other markets to enjoy fresh avenues of growth.

Some examples of the crowning success stories that have done India proud in the construction industry.

Unfortunately, industry has to pull up its socks: all that we can call good work is really the replica of work done elsewhere. The only original work worth quoting is the Lotus Temple that was constructed 15 years ago in Delhi.

How has the Indian industry assimilated the latest technological advancements to make functionally-better and more user-friendly designs?

Ingress of external agencies who joined hands with Indian companies in 70s and 80s led to technological advancements. Presently, the largest workload is in the roads and highways sector but again, there is nothing spectacular about it.

Quality benchmarks: mechanism of ensuring quality of the construction.

The mechanism for ensuring quality needs lot of push. People at operational front have to ensure this: this is really a sad situation - - like a student who passes with 50% marks. There is nothing much to be proud of: we are in the phase of setting up such systems.

What is the role of CEB (construction equipment bank)?

An equipment owner is shy to invest in purchasing new equipment, primarily due to the erratic manner in which streams of workloads are being done. On the other hand, if he doesn’t invest, he has to rely on manual approach which doesn’t ensure the quality or the pace. So, today, mechanization is a necessity rather than a luxury.

The nation as a whole has invested close to Rs.120,000 crores in the construction equipment of which the utility factor is only 27%, or so. To avoid such a waste, CIDC is working on a shareware concept, where one trades in equipment, as one trades in money.

I’m glad to mention that the first such CEB is already in operation, namely SREI Int’l, Calcutta whose present equipment base of Rs. 150 crores is set to zoom past Rs. 1500 crores in a couple of years.

On insurance in the construction industry.

There is dire need for covering risks in the construction industry. CIDC is in touch with the Actuarial Society of India to profile, identify, quantify and price a few insurance and non-insurance products to create safety nets to mitigate the effects of risks. Lot of work is going on.

Top ten players in the industry.

Without any ranking in mind, one could name: Larsen & Toubro and ECC Group, Gammon Indian Limited, Continental Construction Ltd., Simplex Concrete Piles India Ltd., Unitech Ltd., Ansal Properties & Industries Ltd., Jaiprakash Industries Ltd., Hindustan Construction Co. Ltd., Bhageeratha Construction Ltd, and Som Datt Builders Ltd.