The railway sector has been progressing steadily for the past few years. The sector is currently on a path of transformation to make the railways future ready. Alongside, new and innovative ways to improve operational efficiency and passenger experience are being explored. In a panel discussion at the recent Infrabuild India event, industry experts discussed the developments in the railway sector in the past one year, their construction experience, the impact of Covid-19, the benefits of digital interventions, the factors resulting in project delays and upcoming opportunities. Excerpts…
The outbreak of the pandemic has marginally impacted project execution and implementation. The project delivery has been good overall both for the metro and the railway segments. Larsen & Toubro (L&T) has been able to successfully deliver some projects such as the western dedicated freight corridor (DFC), electrification works, etc. In the metro domain also, the company was successfully able to commission projects like Kanpur Metro Ballastless track package and project delivery was not impacted significantly. Tendering for projects has also been going on and the company has been progressively bidding for new projects. In 2022, it is expected that new tenders for both metro and railway projects will help create a decent pipeline of upcoming projects.
The outbreak of the Covid-19 pandemic led to issues related to the workforce. In a bid to mitigate these risks, some of the key strategies undertaken by L&T are corporate social responsibility activities and provision of health facilities to workers and labourers associated with the company. The company is of the view that if workers and labourers are taken care of, then the project progress is automatically ensured.
With fluctuations in commodity prices, especially the increase in steel and copper prices, the project costs have been severely impacted in some cases. Even though price fluctuations are covered in the price variation clause, it still does not give full compensation. L&T has deployed digital technologies quite extensively on all the three fronts, which includes monitoring of assets, project progress and workforce with the help of mobile-based applications. The company is also able to generate dashboards on a daily basis from each of the projects, which display the daily and cumulative progress of the project. Recently, an application has been introduced for the registration of workers in a bid to keep a headcount of them, digital attendance and capturing the skill sets. Digital technologies have been incorporated in project execution more extensively after the outbreak of the ongoing pandemic. The company is expected to continue the same in the future.
The key challenge that the railway sector faces during project execution is primarily associated with land acquisition. If land acquisition is taken care of, then big companies such as L&T, Ircon International and Tata Projects, will not face many issues. In order to build a trained workforce, L&T has its own in-house skill training institutes, wherein they train their human resources as per needs. The engineering, procurement and construction (EPC) model has been successfully demonstrated in CORE electrification projects and DFC track projects.
Even with the pandemic prevailing, the year 2021 went significantly well in terms of construction. The industry did face a setback between April and June 2021 amidst a rise in Covid-19 cases; however, it picked up pace effectively in the latter quarters. Mega Metro Engineering successfully rendered special consultancy to Gujarat Metro and also completed the design work for Maharashtra Rail Infrastructure Development Corporation Limited’s Pune-Nashik stretch, for which the tender is going to be floated soon. The company also successfully rendered TMC services for the National Capital Region Transport Corporation’s Package 4.
The company faced project time delays owing to the ongoing pandemic, which it overcame by deploying additional resources, mechanisation and additional machineries. Further, to overcome the gap that has been created over a period of time, efforts are being made to accelerate the progress and increase the quantum of work that is being done in a month. It is expected that the company will be progressing on its planned growth trajectory soon and expect moderate growth rate of 10 per cent in 2022.
The cost of any project is impacted by commodities as the material cost of any project is nearly 40 per cent of the project cost. With the material cost witnessing a significant jump to the extent of 10-15 per cent, a major net impact is expected on the cost of the project. The outbreak of the pandemic unveiled the potential of digitalisation to a great extent. Design discussions and meetings are now being carried on virtually. Further, design drawings are converted to construction drawings online and sent directly to the site for implementation. Robotic machinery is also being deployed for excavation and construction works. Total Station is being used for surveys and drones are being used extensively for project progress monitoring. Three-dimensional modelling and building information modelling are also being used for design services.
Land acquisition is one of the key challenges that the railway sector faces. In case the land acquisition is delayed, work should be expedited with the help of extra resources, in an attempt to avoid time overruns. Apart from this, another challenge is the interface between various parties, as a result of which civil work affects the mechanical part of project execution and vice versa. The outbreak of the pandemic has also led to logistics challenges due to containment on containers and material procurement, as it faced a crunch from time to time. Having skilled manpower is of extreme importance to enable easy execution of projects. Therefore, the company plans on giving training to its manpower on a weekly basis.
Rajeev K. Sinha
The outbreak of Covid-19 and the subsequent lockdown severely affected construction works in the railway sector in 2020. However, 2021 fared well and was utilised in terms of infrastructure growth. Nearly 1,800 km of track construction, more than 4,000 km of track renewal and 3,000 km of track electrification was successfully completed. With passenger movement being restricted in 2021, the entire focus was shifted to the growth of freight movement. In a significant development, freight loading and revenue in 2021 surpassed the records of 2020. The pandemic has taught the sector to deploy mechanisation and make work less human dependent. Ircon International is going for large-scale mechanisation. Tracks are being constructed by new track construction machines, which are able to lay tracks at the speed of 1 km per day. Similarly, bridges are being constructed with mechanical equipment and the ultimate aim is to reduce the requirement of labour. Further, in order to reduce filing and documentation work, e-office has been deployed by the company and all files are now on the e-office platform, thereby reducing paperwork substantially. Planning and monitoring of projects are being done by Primavera. The company provides in-house training to its staff for various levels of expertise. Earlier, these trainings were physical, but with the outbreak of the pandemic, training sessions are now conducted online.
Land acquisition continues to be the main challenge that is faced in the execution of projects. As per current guidelines, 70 per cent of the land must be acquired before inviting tenders; however, acquisition of the remaining 30 per cent sometimes takes a lot of time, thereby resulting in cost and time overruns. It takes an average of more than two years for the acquisition of the remaining 30 per cent. Meanwhile, obtaining forest clearance is another issue, which takes a lot of time, in turn, slowing project implementation. Interdepartmental issues also pose challenges in project execution as decision-making slows down. The government has now launched Gati Shakti, wherein 16 ministries have been brought on the same portal. It is expected that this initiative will help in speeding up decision-making.
Railway sector contracts are mostly on the Item Rate Contracts. EPC contracts are also being planned and invited. However, experience with EPC contracts has not been encouraging in railways as safety of the structure is very important whereas contractors aim to economise the construction cost which sometimes may have bearing on safety of structures. There have been some instances in highway projects where structures constructed on EPC mode have failed due to design issues. In item rate-based contracts, wherein the designs are made either in-house or by third parties and contractors are not allowed to make designs.
The way ahead
The railway sector is growing at a face pace. In 2022, the construction of 2,500 km of new lines and doubling of tracks is planned, along with 6,000 km of track electrification. In addition to this, new road overbridges and rail over bridges are planned. Going forward, the seven high speed rail projects under proposal will enable the complete transformation of railways, which will be at par with the international level. Similarly, other dedicated freight corridors under planning, converting important routes of the the existing railway network to semi high speed corridor will also offer huge construction opportunities and help in transforming Indian Railways.