'The construction industry is starved of finance'
By Prashant C. Trikannad
Intercontinental Consultants and Technocrats Pvt. Ltd, New Delhi, provides comprehensive services in all facets of planning, preliminary and detailed engineering design, and construction supervision of infrastructure projects. Founded in 1987, ICT's operations cover roads, highways, expressways and toll roads, bridges, flyovers, interchanges and over-bridges, civil aviation and airports, urban and rural infrastructure development, and water supply among others. The company has undertaken consultancy assignments in 23 countries.
In this interview K.K. Kapila, Chairman and Managing Director of ICT Pvt. Ltd, tells Project Monitor about his views on the prospects for the construction industry, the impact of rising steel prices on projects and the major problems facing the sector.
What are the future prospects for the construction industry? Which areas vis-à-vis roads, highways and bridges, airports and dams are promising?
The construction industry has entered a phase of quantum growth. This has been necessitated by the urgency to address the inadequacies in infrastructure, which has been universally recognised as a major constraint in the path of economic growth and development. Despite time being taken in developing appropriate systems and regulatory mechanisms, provisioning of infrastructure, particularly the highway sector, has made a promising start. The National Highway Development Programme envisages an ambitious programme of developing 13,000 km of national highways to 4/6 lane standards comprising the Golden Quadrilateral and the East-West and North-South Corridors at a total cost of around Rs 54,000 crore (at 1996 prices). This programme has provided the necessary fillip to the construction industry wherein project management, adoption of state-of-the-art equipment, utilisation of large quantity of materials and resources, coupled with sophisticated management tools have emerged as the key issues. The challenge before the construction industry is to bring in practices, the best world over.
Another important sector, which holds promise, is the gigantic "Linking of Indian Rivers" project encompassing 31 river basins and is estimated to cost Rs 5,60,000 crore. This programme will again spread across the whole country and with massive inputs from the construction industry.
Besides the above, large projects for urban infrastructure, metro, housing etc., are likely to attract massive investments both from the public and private sector, calling for high level of expertise and project management skills from the construction industry.
What is the impact of rising prices of steel and cement on the construction industry?
The cost of projects is likely to increase as a result of the increase in prices of steel and cement, the two basic materials used in construction. However, such increase in costs has to be compatible with international prices, in view of WTO imperatives. At the same time the agencies will have to enhance their efficiency and competitiveness, and optimise project costs so as to maintain their position in face of stiff global competition knocking at our doors.
What are the major problems facing the construction industry in India?
Our construction industry suffers from capacity constraints, lack of trained manpower and managerial skills with performance much below international level. Though there are islands of excellence in a sea of mediocrity, our companies must become global players by modernising, intensive training of their manpower, enhancing their turnover and change of mindset. The industry is starved of finance. Small and medium contractors do not have the wherewithal to upgrade their capability, both hard and soft, to undertake high value time bound projects. FIDIC conditions are not being rigorously followed and the contract agreements continue to be heavily loaded in favour of the owner/client. Quality, safety, environment and social aspects are also not being addressed appropriately.
Has your company bagged any new projects either in India or abroad?
ICT has bagged two new projects:
* Preparation of cadastral surveys for the Rural Roads Development Project, Philippines, for Asian Development Bank.
* Proof consultancy for the detailed design of Yamuna Bridge No.249 near Delhi Junction and Ganga Bridge No.52 near Garhmuktesar for Northern Railway.
Are you seeking projects in Iraq?
ICT, with a number of professionals having past experience of working in Iraq, has been actively following developments in Iraq and opportunities of providing consultancy services for infrastructure building by direct liaison with various concerned organisations.
What is the current order book position of your company?
We are regularly submitting proposals for various projects in India and abroad and at present about 22 proposals are under various stages of evaluation.
'The construction industry is starved of finance'