Major Hindrances

Construction experience and challenges in the tunnelling segment

Over the years, contracting practices have evolved from item-rate contracts to engineering, procurement and construction and design-build-operate contracts. The technology deployed for tunnel construction too has evolved greatly from the drill and blast method (DBM) to more sophisticated boomer equipment such as tunnel boring machines (TBMs) and the New Austrian Tunnelling Method (NATM). Key technological advancements in the segment include the use of enhanced software, advanced drilling systems, remote blast monitoring, electronic detonators, computerised jumbos, etc. Further, new and advanced features have been added to tunnelling equipment, thereby increasing efficiency. Internet of things is also being implemented by players on big machines. While the adoption of these advanced technologies has turned out to be handy for contractors and other stakeholders, they have had a mixed experience in the tunnelling segment. Some projects have encountered implementation challenges that has led to time and cost overruns. Overall, the actual progress has been slower than desired.

Project execution has undeniably improved over the years with the deployment of techniques such as NATM, TBM and microtunelling with support from foreign players. Contractors have witnessed faster progress in projects that have quick decision-making coupled with advanced technological capabilities. However, some international contractors have faced issues in undertaking tunnelling projects due to the difficult project implementation conditions. The absence of risk sharing between clients and contractors has been one of the deterrents for international players. As a result, they have shown an inclination towards working along with Indian contactors in a joint set-up instead of undertaking projects individually. Construction contracts in the tunnelling segment often have unclear terms and conditions, ambiguous roles and responsibilities of contractors and project developers, and a skewed risk-sharing mechanism. Besides, deviations in contracts due to extra items, greater quantities, changes in specifications, time extensions, etc. result in disputes. The slow litigation and arbitration process results in projects being stalled and hefty time and cost overruns for the developer. Recently, the reduction in the time period for project implementation has posed another challenge for the contractors. This has led to increased deployment of tunnelling machines and equipment in order to accelerate the process, further increasing project costs. Specialised equipment such as TBMs have high initial procurement and installation costs leading to huge upfront costs at the start of the project, which poses a challenge for the contractors. Besides, geological surprises often result in high wear and tear of equipment. This is encountered especially while constructing tunnels in the Himalayan ranges where, more often than not, unexpected geology and rock patterns are encountered. This increases the operating cost of the equipment as well.

Land acquisition too has been a big hurdle in tunnel construction as contractors cannot begin construction work in areas where the land has not been acquired on time. Frequent agitations by the local population further lead to disruptions in the construction of tunnel projects. Local issues such as land acquisition and compensation and strikes result in time overruns and working capital issues for contractors. While most of the other challenges can be addressed by mutual cooperation among the contractors and their clients, these local issues lie outside their domain. There are examples of office staff and skilled and unskilled labour leaving a project midway in case a higher wage is offered by another contractor. This leads to contractors searching for new labour to meet their requirements.

Tunnel contracts, especially government tenders, are awarded to the lowest bidder after their technical and financial bids are analysed. There have been instances of bidders quoting lower-than-feasible bids to win contracts, resulting in unwarranted competition and confusion in the entire bidding process. This becomes even more problematic at later stages of project development. Therefore, taking into account the prior experience of bidders could be helpful in avoiding such situations. The time constraint for evaluation of information given in the detailed project reports (DPRs) during the bidding process is another major issue for contractors. The limited time allowed for this assessment makes it difficult to evaluate the results of various investigations of the project site properly, and often these are insufficient. Inadequate investigations of ground and soil conditions while preparing a DPR leads to the failure of the tunnelling project. Unexpected soil and rock conditions encountered during the tunnelling process call for a revision in the conditions drafted in the tunnelling contract at a later stage. Sometimes, the tunnel designs prepared during the pre-bidding stage or as part of the feasibility studies are difficult to implement during construction, creating problems for the contractors. This leads to a revision of the contract and creates impediments to timely project completion. For instance, tunnelling activity in the Himalayas is confronted by a range of geological problems such as difficult terrain, thrust zones, folded rock sequence, in-situ stresses, ingress of water and gases, high level of seismicity, etc., which often results in the tunnel design deviating from the DPR.

Impact of COVID-19

The COVID-19 pandemic has resulted in delays in the tunnel designing process, despite the use of digital platforms. There has been a loss in productivity due to the physical distancing norms. Besides, project implementation has been slow due to a single-shift system. This has led to a loss in productivity as night shifts are not permitted. Separate state-wise guidelines regarding e-passes have acted as a hindrance in the movement of materials across borders. While contractors have taken steps to ensure compliance with the distancing guidelines, it is not feasible to adhere to these norms while undertaking construction activities. Besides, the contractors are already incurring additional expenditure on manpower mobilisation to restore activities that had been halted due to the lockdown. They are also providing additional on-site medical facilities, undertaking regular sanitisation of workplaces and issuing standard operating procedures. Supply chains have been greatly affected due to the lockdown. Despite advance payments made by the contractors, orders have suffered from delays in delivery. The shortage of labour and raw materials is another issue that has come up due to the prolonged lockdown. However, with the gradual easing of the lockdown, deliveries and cash flows are expected to improve in another two-three months. Contractors have successfully resumed construction activities, though with compromised efficiencies. The government needs to step in to improve cash flow by releasing payments and long-term claims, thereby assisting contractors in resuming activities smoothly.

The way forward

India still lags behind many countries on the technological front in the tunnelling segment with very few TBMs being operated vis-à-vis other countries such as China. There is thus an urgent necessity to invest in the acquisition of mechanised equipment in order to keep pace with demand in the construction industry. Policies and contracts need to be fair and not biased towards one party or another. Besides, designing balanced contracts, ensuring equitable sharing of risks with contractors, and treating contractors and consultants as partners in projects will go a long way in building the confidence of contractors. Cost overruns can be avoided by incorporating the cost of insurance and bank guarantees in the total project cost. Further, it should be ensured that feasibility studies and soil investigations are completed and resources are mobilised before starting civil construction. The provision of an effective dispute resolution mechanism is imperative in order to reduce the number of cases going into arbitration.

Net, net, it is important that all the parties involved in project implementation work in a collaborative manner to meet the targets and timelines set for the project.

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