— Ashwin Gandhi, President, Crane Owners Association of India
The Crane Owners Association of India is a leading trade association representing companies that sell, rent and service equipment used in construction, mining, forestry, power generation and industrial applications. Ashwin Gandhi, in an email interaction with Sandeep Menezes, feels that the main challenge facing the crane rental segment in India is recovery of dues from contractors and end-users.
It’s been nine months since a new government took over the nation’s reins. How is the performance of the crane rental segment?
Since the new government has taken over, the crane rental segment’s performance has not improved, but it remains the same. However, many power plants and windmill projects have suffered heavy losses due to the previous government’s policies. Only after the recent budget, infrastructure investment has commenced and there are hopes that the crane rental segment may get some boost.
What are the main challenges facing the crane rental segment in India?
The main challenge the crane rental segment in India faces today is recovery of past two to three years’ dues from contractors and end-users. Service tax burden has also resulted in a negative cash flow situation for all crane owners in the country.
Most customers insist on renting newer machines even if older machines are in good condition and still efficient.
Most of the clients demand newer cranes on rent basis and the situation has not improved vis-à-vis older cranes. Thus, there is pressure on rental companies. Older cranes and machines, even if they comply with all safety standards, are preferred by only a few for deployment, that too at a lower price.
How much of the crane rental segment is with the larger players vis-à-vis the medium and smaller players?
Larger players definitely have an edge over medium and small crane owners since the higher capacity cranes (beyond 200 tonnes) owned by mostly large players earn 10-15 per cent more rental charges from the end-users.
With the huge shortage of skilled manpower nationwide, how do crane rental companies handle the situation?
In the past six months, a large number of mobile and crawler crane have been imported; both new machines and used secondhand machines, whereas operators, technicians and engineers for maintenance of these cranes are in short supply in India. Crane rental companies, in small and medium sector, outsource the services of operators, technicians and engineers at a higher cost. Those crane rental companies which have their own in-house maintenance facility are able to sustain maintenance cost and train skilled manpower.
What will COAI’s strategy be to assist growth in the crane rental segment and protect the interest of its members?
The Crane Owners Association of India is consistently assisting its members by giving proper advice and guidance on safety standards and on recovery of their dues from defaulter clients, methods and procedures to reduce expenditure on insurance, RTO tax, entry tax etc. This is a continuous effort on the part of COAI and it also assists its members to standardise format for quotations etc. to safeguard their interests.