The Construction Industry Development Council (CIDC) channels its efforts into an abundance sub-streams relating to the construction industry in India, with an overall emphasis on helping the industry move from the current state of rule-bound, lowest-price-based contracting to a more quality-conscious, time-bound and technology-driven one. 

 

India's construction sector is the country's second largest employer after agriculture and, owing to this, has huge employment generation potential, combined with a cascading effect on all sectors of the economy, thus necessitating its functioning to be streamlined. 

 

Enter...CIDC

 

CIDC recently organised a national conclave and exhibition on construction called 'Future Directions for Capacity Development in the Construction Industry', with a view to tapping financial resources, and channelling research and development and human resource development.

 

Dr Swarup elaborates: “CIDC has been entrusted with the responsibility of founding national plans as far as infrastructure is concerned, and the 'Future Directions' exhibition enabled for provisions to be made in respect of the national plan that we had created. Ultimately, though, it is the government who has to implement the national plan. In India, there exists three layers of government, each of which contributes to infrastructure development; these are: the urban local body, or city government, the provincial government and, thirdly, the central government. Two or all three of them may partner, or work in isolation, then the sources of funding are collected at each end, but whatever the case, the planners are distinguishable from the implementers.” This is where CIDC comes in: “We intervene between the planners and the implementers,” he points out.

 

Ultimately, the execution of a project is nothing but a commercial transaction between two or more agencies. There is a buyer and there is a set of sellers, and there should be no suspicion between them as to what each has bought or sold. Obviously, time and cost and the elimination of overruning on these things is extremely important in the context of any project within the construction industry, which is a capital-intensive business. A lot of money is spent, and even small projects can cost a few hundred million dollars that, in many cases, is public money. So, somebody is a custodian and somebody has to answer for it, and not only in India – our government is the biggest buyer of construction services all over the world, either directly or indirectly. Therefore, whether it is the local government, or the provincial or the city government, the government is all-pervading and, therefore, the public's money must be protected. 

 

“Having laid down the policies, the second step was to go back to those responsible for implementing the project and tell them what we wanted them to do to enable us to raise the standard of construction in India to an international level.”

 

“From adversity comes innovation”

 

So, how has CIDC responded to the impacts of the recession in India's construction sector? Dr Swarup explains: “The tremors of the global economic downturn have also been felt by the Indian construction sector, resulting in low incremental order flow from domestic and international clients, lack of liquidity, high cost of borrowings, increased cost pressure (as a result of the fluctuating cost of raw materials such as cement, steel and oil) and delays to the execution of existing projects. 

 

We firmly believe that with adversity comes innovativeness: the global crisis has definitely lead to discernible trends, which will help the industry sustain and grow in future. Some of these trends are already happening, including bidding for high margin 'niche' projects, stronger working capital management resulting in better operating cash flows, and increased execution capabilities.”

 

Dr Swarup is keen to stress the importance of this latter trend as a driver of future growth in India's construction sector and, more imminently, to help mitigate the negative impacts of recession: “Companies should be placing more emphasis on the timely execution of projects, to ensure the optimum utilisation of resources. Furthermore, companies are tending to delay in completion of projects, and thus, additional costs are being incurred by way of compensation for each additional day of labour, and many other factors.

 

“Cash is King”

 

“Companies can save capital by outsourcing the specialised jobs such as the grouting, drilling, waterproofing and heavy earthmoving requirements of construction projects. The lateral expansions can be thought after the bad time is over. Moving cautiously will save the sector from the hammer of recession and keep the company cash rich. As during the phase of recession, it is considered that ‘Cash is King’.” He adds that, “In addition to streamlining the current contracting and procurement practices to arrest time and cost overruns on projects in the country, there is also a need for certain policy interventions by the Government of India for improving the current financial environment and to mitigate the impacts of the recession.”

 

A spectrum of solutions

 

Over the next twelve months, CIDC will be busying itself with a broad spectrum of initiatives, including making substantial changes to regulatory systems for adoption by the government, as well as instilling global best practices in the functioning of the construction industry across the board. Dr Swarup elaborates: “This will include a strong education angle, such as the initiation of higher learning institutes offering training in construction-related streams, with the aim of imparting skills to a minimum of 10 percent of India's construction workforce.”

 

A number of solutions are already being sought to alleviate the impediments currently being faced by the construction industry, by way of cheaper financing, upgradation of technology, human resource development, project management, safety and quality issues, and the issue of sustainability – in particular, the issue of embodied energy in building structures.

 

On sustainability

 

Dr Swarup takes up the story: “What is currently happening is that there is a clear bias towards the HVAC and lighting industries, with little regard being given to construction materials and methodologies, which consume a larger share of energy. 'Green' building initiatives are basically being lost and there is absolutely no consideration as far as embodied energy is concerned. This needs to be corrected, so our current research is directed towards developing an embodied energy schedule, thus enabling the builder to first assess and then choose the methods, materials and construction technology to ensure the construction of 'green' buildings.

 

“So far, the impression that has been pushed in the mind of the consumer is that the less electricity consumed, the greener a building is, or that if they are using environmental or climate control instruments, the building will be greener and, therefore, more sustainable. However, I don't think this is the kind of sustainability or 'greenness' that needs to be emphasised, so we are working on those fronts.”

 

“A building saved is a building built”

 

In 2005, recognising that the Indian sub-continent is vulnerable to natural hazards such as earthquakes, cyclones, landslides, floods and tsunamis, in addition to the degree of risk posed to the huge volume of existing residential and non-residential building stock nationwide, the Government of India implemented the Disaster Management Act (DMA). Dr Swarup takes up the story: “With the establishment of DMA and National Disaster Management Authority in (NDMA) in 2005, and the paradigm shift in the national policy, disaster risk mitigation has been placed on a firm footing,” he affirms, pointing out that, “CIDC has been nominated as the agency for the vocational training of construction workers by the National Disaster Management Authority, which is an authority set up by the government of India to look into all kinds of man-made or natural disasters, such as tsunamis, earthquakes, explosions or chemical devastation.

 

Infrastructure construction is a human business. Ultimately, CIDC is a planner and facilitator and, as such, we must direct our research towards the people who are going to be implementing the developments, and these people need to be imbued with the right kind of statutes, systems and methods, which need to be demonstrable, particularly in the case of disaster mitigation. There are cases where the persons working on-site may not be especially qualified or that, to be bound together properly, the reinforcement bars need to be welded, the mesh has to be applied, and the concrete has to be laid in a certain manner.” 

 

CIDC overcomes this problem through education and, in 2007, working on the premise that 'a building saved is a building built', CIDC took the initiative to establish a nationwide network of 'retrofitting clinics', to train engineering personnel to undertake risk assessments on government buildings and other structures. “This will provide engineers with the requisite skills and institutional and technology transfer mechanisms to deliver services to asset owners – both in public and private sectors – for repair, rehabilitation and retrofitting, with the aim to improve safety levels and minimise or even remove the threat to buildings and structures in the event of natural hazards,” qualifies Dr Swarup.

Raising standards across the industry

 

For the first time in the country, CIDC provides the impetus and organisational infrastructure to raise quality levels across the industry and, in doing so, has played a vital role in securing the commitment of India's government, industry professionals and peer groups to act in the interests of the country's construction sector. Dr Swarup explains: “There is a major project being implemented here known as JNNURM – the Jawaharlal Nehru National Urban Renewal Mission, named after our first Prime Minister, which involves the development of over 60 cities spread across the country. We are supporting local government bodies in order to establish quality control benchmarks and to set up the laboratories required for testing the quality of construction materials in these areas – these benchmarks are being laid down by us now.” 

 

“Third Party certification for quality and safety at construction works should be made mandatory, including the necessary provisions for procurement to ensure that third party certification is complied with by all employers,” asserts Dr Swarup, adding that, “The first commitment that the project owner makes is that he will ensure the workers' welfare.”

 

Given the complexity of health and safety within the construction industry, CIDC has prepared  concise and easy-to-follow manuals to aid workers from nearly all sectors within India's construction industry. “Recently, we created a total procurement package for several power projects on behalf of the Ministry of Power,” affirms Dr Swarup. 

 

This is the first of three sub-streams via which CIDC procures health and safety management for India's construction sector. “Secondly, we conduct training for all the workers who will be actively involved in these projects so that they are aware of the risks and know what to do in the event of a hazard and, thirdly, we ensure that this is implemented in line with overall monitoring and quality control systems,” continues Dr Swarup. 

 

Quality and safety issues clearly rank high on CIDC's agenda – although, as Dr Swarup explains, they are not the principal consideration. “Having completed a project on time and with due cost, the second most important issue is that it has been achieved with health safety and quality in mind. If one had to prioritise between timely execution and cost and safety and quality issues, then I would choose for a project to be executed in this order, although there is only a microsecond's thought between these considerations,” he clarifies.

 

Protecting one's own interests

 

Frankly speaking, the whole World Trade Organisation (WTO) and agreement on trade and services is bedlam. There are agreements that have been signed, but if one looks at the kind of language used, it is fairly open-ended and leaves a lot of room for countries to do their own thing,” explains Dr Swarup, likening the situation to the Aesop's fable about the Fox and the Stork: “The fox invites the stork to dinner and serves him soup in a bowl so the stork cannot sip from it and, in turn, the stork serves the fox dinner in a long-beaked container. Similarly, with the WTO, each country is trying to protect its own interests and, in doing so, the statutes have very little meaning,” he affirms.

 

Then, of course, there is the matter of demand and supply. For example, in engineering and architectural services, there are certain issues with regards to the qualifications of workers crossing borders and entering these services, as well as provisions for these workers. Yet, the fact of the matter is, that if an employer is looking for someone to provide services, there are always going to be ways and means, and the national government is in a position to invite people on a short-term visa or some other basis. We do try to answer all of the questions directed our way regarding these matters but the degree of freedom is almost infinite.

 

So, one has to try to address the real situation in terms of how an agreement will apply within each country. There must be some rules of the game, where someone is going to lose and another gain, otherwise everyone will lose. However, it is a free-for-all situation, so I am not very impressed nor am I convinced that the statutes are being adhered to by any of the national governments,” summarises Dr Swarup.

 

CIDC's ongoing research initiatives and proactive efforts to streamline processes and arrest time and cost overruns have provided leverage to India's construction industry during the current economic slowdown. And, whilst greater collaboration will be required to extend the impacts of such an agenda to an international level, India's construction sector enters the next stage of its development with CIDC leading the way.