Construction projects worth more than Rs 59 lakh crore are under development across the country and most of them have been impacted severely by COVID-19, global professional services firm KPMG has said.
Labour and capital can be expected to be in short supply once the restriction ends. Thus there needs to be a framework in place to prioritise projects over a 30 to 45 days window.
“In a time-bound manner, project owners should chalk out a plan to minimise the impact of COVID-19 and ensure viability and sustenance of projects going forward in a changed environment,” said KPMG in India.
Project owners must optimise engineering layouts with a focus on target value design. They must explore off-site modular construction technologies to optimise time and resources while enabling a controlled working environment for labours, it said in a recent study.
At the same time, project owners should revisit project management processes to remove inefficiencies, promptly identify and remove external stakeholder interface bottlenecks.
The study said India’s goal of becoming a five trillion dollar economy rests on the completion of critical infrastructure under the National Infrastructure Plan.
The Indian construction industry employs over 4.9 crore people, close to 12 per cent of the nation’s working population. Further, it has a multiplier effect on nearly 250 allied industries.
Significantly, the study said, one of the largest construction company in the country is spending about Rs 15 crore per day to provide support for 2.3 lakh labourers staying at labour camps. They are being provided with food and basic amenities, wages, sanitation and medical facilities.
“With a number of such companies supporting the essential needs of labourers at sites and physical work progress on a standstill, this is adding to the stress in the value chain,” said the study.
Besides, construction productivity gets impacted during the monsoon period. This current period until June to July, when monsoon sets in for most parts of the country, is critical to not loose high productivity.
“Given the forecasted subdued demand in sectors like real estate, the available surplus resources including labour and equipment will require rapid alternate deployment to minimise the incremental impact of COVID,” said the study adding that modular methods and up-skilling will become increasingly relevant.
COVID-19 impact across the economy is sudden and wide-spread. “But this presents an unprecedented opportunity for us to respond and reset some of the baselines in the construction sector in India.”
Post COVID-19, the construction sector could consider the introduction of new clauses in future contracts to set out clear guidelines for action and relief in extreme eventualities and to minimise disputes that may arise at such a time.
