While the industry grapples with challenges like escalating project costs and prolonged construction periods, emerging technologies can redefine the Indian construction industry and take it to the next level globally. Technology is emerging as a catalyst for change, writes Garima P.
Located on NH-8 near Japanese Zone connecting Delhi and Jaipur, Neemrana is the most sought-after place in NCR region with major industrial development taking place. As part of the Khushkhera-Bhiwadi-Neemrana (KBN) zone on the Delhi-Mumbai Industrial Corridor (DMIC), Neemrana has seen tremendous growth as an industrial, tourist and a preferred real estate zone. Rajasthan is the only stateùamong the six states through which the corridor is passingùwhere two nodes or growth zones would be developed simultaneously. Rajasthan accounts for 39 per cent of the area through which this ambitious, Japanese funded, 2,700 km long project is being laid out. DMIC covers 80 per cent of the state's population and 60 per cent of its area. And with interests reviving in the DMIC project, the scope of growth has simply widened and given the urban construction industry a big push. DMIC, which passes through six Indian states, accounts for 43 per cent of national GDP, half of the nation's industrial output and exports and employs 40 per cent of its total workforce, has been a game changer in the urban construction market.
With five metropolitan cities in 1951 to 35 in 2001 to 53 in 2011 and projected to about 68 in 2030, the pace of urbanisation in the country is growing at a break neck speed. A McKinsey Study (2010) on Indian urbanisation projects a capital investment need of $1.2 trillion over the 20 year period 2010-2030. This implies that India has to boost its annual per capita urban capital spending from $17 (as compared to $116 in China, $127 in South Africa and $391 in the UK) to $134. High Powered Expert Committee (Isher Judge Ahluwalia Committee) projected for 20 year period (2012-31) about $870 billion investments for urban infrastructure.
And for infrastructure development to keep pace with this rapid urbanisation is becoming a burgeoning challenge. The slowing economy may have put brakes on the expansion plans of the various partners in growth, but the positive trend in construction can still be experienced at large. The projects for roads, buildings and bridges that have been delayed will need to be done sometime, and it is this fact that is making the various stakeholders gear themselves up for the challenges ahead. "While rural infrastructure remains a key area of focus for progress, several projects announced for development of urban infrastructure under JNNURM or projects like MRTS have created strong demand for construction equipment and will continue to do so in the coming years," says Vipin Sondhi, MD & CEO, JCB India Ltd.
The demand for construction equipment is associated with investments in infrastructure and construction activities. The share of construction in India's GDP (as percentage of total GDP) is consistently growing for the past 10 years. Across the infrastructure spectrum, the investment multiple of the sector is set to grow. Thus, the environment is ready for a long and sustained growth in the demand for construction equipment.
Tools for growth
India's earthmoving and construction equipment (ECE) industry has enjoyed strong growth over the last seven years as a result of rapid economic development in the country. The organised construction sector in India (eg roads, urban infrastructure) accounts for approximately 55 per cent of the ECE industry; Mining, irrigation and other infrastructure segments (eg power, railways) account for the rest. These sectors are growing strongly, leading to the expansion of construction-related industries. While the Indian economy grew by 5 per cent in FY13 as compared to 6.2 per cent in FY12, the construction industry grew by 5.9 per cent in FY13 against 5.6 per cent in FY12. When it comes to the construction equipment that does the heavy work of building cities, the market has largely stagnated in Europe and the US. But manufacturers of this equipment are establishing production in India and China, where urban populations are forecast to grow by 497 million and 341 million respectively by 2050. Experts indicate that a lot of urban infrastructure is being constructed in these two countries and the big construction equipment manufacturers have turned up.
Emerging technology trends are redefining the Indian construction industry and taking it to the next level globally. Technology is emerging as a catalyst for change as the industry grapples with challenges like escalating project costs and prolonged construction periods. Technology holds the key to address these issues and enables the sector to react to changing market conditions effectively and efficiently. New mega-project undertaken, involvement of international consultants, and participation of Indian consultants and contractors in international projects has led to infusion of new materials, equipment and technologies in the construction practices in India. It was estimated by the CE manufacturing industry that CE demand would go up to around 100,000 units during 2014.
With the infrastructure and construction sectors undergoing dramatic changes - with skyscrapers being built in cities like Mumbai, and thousands of kilometres of expressways and highways being laid across the sub-continent - builders and contractors are acquiring or looking to acquire sophisticated equipment to execute the multi-million-dollar projects. "India has been self-sufficient in many of the technologies related to tower cranes, elevators etc. However, mobile cranes, tunnel boring machines and other highly specialised equipments have been an issue of concern due to their non-availability. For building urban infrastructure, a lot of innovative technologies and machinery and for underground works, tunnelling, utility identification and high capacity lifting machines are required on an urgent basis," says Anuj Dayal, Executive Director, Corporate Communications, DMRC.
While concerns are being raised about the pace of the development along the DMIC to help the Indian economy tide the economic slowdown, a number of issues pertaining to land acquisition by the states themselves and adapting to technological advancements to speed up the infrastructure development are also present making it a mammoth task to finish in time.
Singapore: a model of Infrastructure Development
Singapore's infrastructure development is certainly a model for the developing nations. The Urban Redevelopment Authority (URA) is Singapore's national land use planning authority, which has been instrumental in building quality real estate. URA draws up long-term strategic plans, as well as detailed local area plans, for physical development, and then coordinates to turn its plans to reality. An efficient land use plan has enabled Singapore to achieve strong economic growth and social cohesion. A professional way of managing and maintaining its real estate has given way to its continued economic progress and future development.
The space constraint seems to have come as a blessing in disguise for Singapore. The authorities focused on raising skyscrapers, huge in number. Instead of scattering its facilities, successful attempts have been made to house everything at one place and in one building, have also added to Singapore's beauty. Many of these buildings have at least a few floors in basements. The builders have not only taken the buildings higher in the skies but have also dug deeper under the ground. The challenge is to find smart solutions so that there will always be space for all needs. Land use is intensified by locating various facilities together instead of separately. For example, storm water collection ponds are located under road flyovers; and stack factories; train stations and bus stations are located over each other. Also there is a strive to constantly find ways to minimise constraints on development by using technology such as cleaner power station fuel to reduce buffer zones of polluting factories, or group such industries together and relocate them.