Change and Project Development
Change is the only constant in today's turbulent times. All of us appreciate this fact and swear by it. However, when it actually comes to grappling with change very few of us decide to really jettison our traditional practices and attempt to embrace change. Anxiety and fear of being questioned for using a new technology often forces us to stick to our normal way of functioning. Resisting change even passively has forced many of our industries from really competing with our counterparts in other countries.
Even in the construction industry our trepidation at embracing change is working against us. Take the slow adaptability in using concrete from ready mixed concrete plants. This is despite acknowledging that the ensuing product is technologically superior to the prevalent practice of mixing cement by volumetric means and producing concrete at site by using small site mixers. Concrete from RMC plants in the country account for less than 3 per cent of the total concrete used. Continuing with the example of concrete, the usage of more lightweight aggregates in the mixture in place of traditional stone and gravel or increasing the usage of blended cement the industry can result in savings on the over all cost.
Another instance to change is our reluctance to see the changing trends in the way projects are awarded. Item-wise bidding for contracts is steadily being replaced by LSTK contracts. Instead of dealing with multiplicity of equipment vendors and service providers, project developers are more comfortable in dealing with a single authority who undertake the responsibility for the entire works: conceptualising, designing, tendering and liasioning with the statutory authorities and so on. Except in public works departments and some state governments, which continue with their traditional modes, big projects are awarded to EPCC for execution. Contracts on BOT basis, BOOT basis and other similar variations will increase as states find it difficult to allocate funds for infrastructure projects. Annuity is another new concept which is making ingress in government contracts. However, many of our contracting companies are not able to bid for annuity contracts because of their inability to make accurate estimation of lifetime cycle costs of a project. Reluctance to take on direct financial exposure on projects also inhibits contractors. By default our construction companies stand to lose out by not able to participate in such contracts.
Take global contracts. The majority of our companies with their puny balance sheets are not able to enter the fray. They are, however, reluctant to form consortium despite acknowledging that consortium bidding is an accepted and prevalent practice the world over. Joining hands is still considered as an admission of our weakness and we are more comfortable in doing job contracts rather than bid jointly and share the works thereafter.
Change has to be accepted not only because it is inevitable but also because it can strengthen us.
Change and Project Development