Alwyn Bowden Â– President & Ceo, Essar Projects (India) Limited
The Indian Construction Industry in general faces a huge dichotomy, neither is it valued overseas, other than as a source of labour resources, nor is it valued at home, because of fragmentation and poor practices, and yet the potenÂtial is huge.
This is partly due to the approach of the Indian construction industry itself and its apparent predilection for securing projects at any cost simply to boost valuations and then failing to deliver, but even more so due to the contracting practices of the customer base. In India almost the opposite appears to be the case, customers do not value good project management, they break contracts into small elements in the belief that this drives lowest cost, and contractual terms and cash are used as weapons rather than as facilitators. This approach acts as a very effective brake on the overall development of the Industry, and ultimately on the health and wealth of the country.
Notwithstanding this there is a seed change coming.
Foreign contractors are looking for Indian contractors to partner overseas, foreign customers are seeking to prequalify Indian contractors, and a small number of competent Indian EPC companies are proving beyond doubt that they can deliver projects safely and on-time even under the most demanding of management regimes.
South Asia, and India in particular, has long been the core source of labour for large parts of the developing world, large numbers of the key project management in territories such as the Middle East come from India, and many international contrÂactors carry out much of their engineering in India. All of the basic stepping stones are there, just waiting for the Industry to shake its shackles.
The next generation of global contractors will come not from China or South East Asia but from India.
Way forward: Of course this will not become a reality unless the government, the customers, and the industry itself wakes up to the opportunity and works hard to put in place the enablers. Imagine an India where there are strong competent contractors working with government and customers to provide projects that create value because they are delivered on time rather than built piecemeal to achieve a perceived lowest cost, giving valuable and consistent income flows because they are built right first time, rather than constantly under maintenance. Imagine the wealth and growth that would come with the growth of strong Indian EPCs working with the Indian supply chain to create dominance in the International markets.