Construction sector bullish on growth

Freight corridor adds to opportunities

Sector Skill Council on anvil 

India’s earthmoving and construction equipment (ECE) industry is looking to strong and consistent growth over the next 10-20 years as the country’s infrastructure development plans come to fruition. This was highlighted at the annual general meeting of the Indian Construction Equipment Manufacturers Association (ICEMA) in New Delhi.

Speaking on the occasion, Mr R K Gupta, Managing Director of the Dedicated Freight Corridor Corp of India Ltd (DFCCIL), said the scope for construction equipment and allied industries was enormous in the unique and ambitious railway project.

The Dedicated Freight Corridor project, being implemented by the railways through the Dedicated Freight Corridor Corp of India Ltd (DFCCIL), aims to connect the important freight lanes between Delhi and Mumbai in the west and Ludhiana and Dankuni in the east. Mr Gupta revealed that over 90% of the land acquisition as also environmental clearances had already been completed. “The remaining portions are in difficult places or require alignment changes. We should be able to complete this in six months,” Gupta said. 

The DFCCIL is also going ahead with its concept of setting up multimodal logistics parks at 6-7 strategic locations. Mr Gupta outlined the mechanisation approach of the project to ensure quality, timely delivery and reduction in costs. The commissioning of the first phase has already begun and that of the entire project likely to be completed by 2017. 

The construction sector is a major employment driver, being the second largest employer in the country, next only to agriculture. This is because of the chain of backward and forward linkages that the sector has with other sectors of the economy. About 250 ancillary industries such as cement, steel, brick, timber and building material are dependent on the construction industry. A unit increase in expenditure in this sector has a multiplier effect and the capacity to generate income as high as five times. 

Mr Ajay Shankar, Member Secretary, National Manufacturing Competitiveness Council, said the industry needed to think big and look ahead. In this regard, a key issue would be availability of skilled manpower. He advised the speedy implementation of ICEMA’s efforts to institute a Sector Skill council for the construction equipment industry. This was imperative, he said, both for increased productivity and better safety records. 

The AGM also saw the appointment of Mr Amit Gossain as President and Mr Anand Sundaresan as Vice President. In his address, Mr Gossain said “ICEMA would continue to work closely with government, policy makers and other stakeholders to have a favourable environment of the construction equipment industry to grow in India.” No effort was being spared to make the Sector Skill Council as reality, he added. 

Mr Glenville Da Silva, outgoing ICEMA President, said that opportunities for construction companies are expected from projects to be undertaken in the opportunities in railways, urban infrastructure. High priority has been accorded to big ticket projects such as the Dedicated Freight Corridor and the PMO has indicated that adequate measures and follow-up would be undertaken to ensure speedy award and implementation of Public Private Partnership (PPP) projects in the port sector. Outlining the journey of ICEMA over the last two years, he said we have aligned ourselves with the global industry and today India is the cynosure of all eyes. 

ICEMA is affiliated to the Confederation of Indian Industry (CII) and currently represents 51 leading companies who manufacture, trade and finance a variety of products such as hydraulic excavators, wheel loaders, backhoe loaders, motor graders, vibratory compactors, cranes, dumpers, tippers, forklifts trucks, dozers, pavers, batching plants, diesel engines, etc. 

Growth in the construction equipment industry in India is linked to the overall level of infrastructure development as well as growth in construction activity. As per the study conducted by Accenture, the industry has the potential to expand six to seven times - the total revenue of US$ 3.3 billion in 2010 to US$ 22.7 billion in 2020. 

New Delhi

May 10, 2013