The construction industry lies at the core of infrastructure development. For long, its progress has been stymied by issues such as regulatory bottlenecks, delays in securing statutory clearances, land acquisition, difficulties in financing and legal challenges.
Many initiatives have been taken by implementing agencies and construction companies alike to deliver projects on time. Of the 1,670 central government projects being monitored, 505 projects are facing time overruns (of more than 40 months), 432 are facing cost overruns (21 per cent) and 202 are facing both time and cost overruns. Eight projects are ahead of schedule and 212 projects are progressing as per schedule. It is in the best interest of both the implementing agencies and construction companies to resolve the underlying issues so as to ensure timely completion of projects.
Speaking at a recent conference organised by Indian Infrastructure, Himanshu Chaturvedi, chief strategy officer, Tata Projects, discussed the reasons behind cost and time overruns, strategies that can be adopted to ensure timely and cost-effective construction of projects and the adoption of sustainable construction. Excerpts…
It has been long observed that the cost effectiveness of any infrastructure project can be enhanced by ensuring its timely completion. Variables such as material and labour costs also have a considerable impact on the cost effectiveness of the project. If the scope of the project is not changed, its timely completion will lead to project commissioning within the set budget.
The construction industry is the least digitalised and this leads to time lags. At present, a very ad hoc process is followed; instead proper planning should be done to ensure coordination in the industry as well as timely project completion.
The sector has seen increased investment and adoption of new methods. Nearly $25 billion worth of investments have been made in the industry in the past five years itself in all three segments of project execution – design, construction and project management.
In the design segment, many new technologies have been adopted such as building information modelling (BIM), which helps in planning resources and early clash detection. However, there is still scope for integrating resource and time planning. The industry has progressively shifted to pre-cast/pre-fabricated construction components. The use of pre-cast/pre-fabricated components saves time, enhances productivity, prevents delays and checks wastage of material. These components are being used extensively in metro projects. The project management segment has witnessed an upsurge in digital interventions in the form of internet of things and project monitoring tools. Most construction companies in India are at an early stage of digital maturity and are prioritising digitalisation to ensure the cost effectiveness and timely completion of projects.
The outbreak of Covid-19 has provided the much-needed impetus to modular construction and digitalisation of the sector. Due to labour shortage and disruptions in the supply chain, construction companies were forced to take up modular construction, thereby unleashing its potential. The monitoring and evaluation of ongoing projects and the launch of completed projects were made possible with the help of digital interventions.
The idea of sustainable construction focuses on three principles – reduce, reuse and recycle. While executing a project, it is essential to reduce waste and energy consumption wherever possible. This can be brought about by the use of modular/prefabricated construction material to prevent wastage, alternative renewable construction materials, and solar power; as well as by recycling the rubble and wastewater that is generated. The adoption of sustainable construction techniques will also help reduce the project cost and at the same time save the environment at the same time.
The challenges faced by the construction sector arise throughout the entire life cycle of project execution. Issues such as delays in land acquisition, securing forest and environmental clearances, fund release and design finalisation, and tendering process; lack of infrastructure support; and legal and contractual issues lead to time delays, thereby increasing the project cost. Unless planned well, the construction industry will continue to experience staggered growth.
The way forward
Timely completion and cost effectiveness of projects are two factors that go hand in hand. Despite the adoption of innovative methods, the construction industry still has a long way to go. Going forward, proper planning, conceptualisation and implementation of projects is imperative to ensure timely execution and avoid cost overruns. The implementing agencies should award projects only after a major portion of the land has been acquired and the required clearances and permissions are in place. It is also essential to nurture the subcontractor base, develop their technical and digital capacities, and strengthen their financial base. With the growth of digitalisation, a lot of data is being generated. Unless this data is harnessed properly, good economic returns on investment cannot be realised.