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Home > News > Mechanised Construction To Address Rising Labour Cost

Mechanised Construction to address rising labour cost




Apr. 23, 2012, 11:00 AM

constructionAlthough, the construction segment in India is growing at a rate of 9% per annum since 2000, the project delivery delays due to labour scarcity is widespread. Not surprisingly, the building industry that had been traditionally conservative in accepting new technologies, is now increasingly adopting mechanized construction and materials. According to Jateen Gupta, Managing Director, Jaypee ISCON Group, their realty projects in Gujarat are currently facing delays despite the sharp increase in daily wages from Rs 80-100 to Rs 180-200 for unskilled labour and Rs 200-250 to Rs 600 per day for skilled labour between years 2009 to 2011.

Interestingly, the paradox of Indian labour market is the rising incidence of scarcity, amidst the labour-surplus economy. As per CREDAI (Confederation of Real Estate Developers' Association of India), the construction sector is facing labour shortage of around 30% persons per day for both skilled and unskilled labour and the situation will worsen in next decade when requirement for workers is expected to go up three-fold.

In fact, apart from the growing volume and size of infrastructure projects, the rising labour costs is considered one of the major factors forcing the industry to look for alternative approaches. Delhi based veteran architect R.M Srivastava explains, “Labour shortage is no longer a seasonal, but a permanent issue.

Growth in overall rural economy, increased agricultural output and income and migration of labourers to the Gulf countries for better prospects are some of the reasons impacting the flow of masons, plumbers, electricians and other skilled and unskilled workers in the construction sector. Also, more and more masons and painters and other skilled workforce are keen on their children taking up better paying jobs in other sectors. All these factors have led to increase in daily wages by more than double for both skilled and unskilled workers.”construction

To address the situation, construction and infrastructure sector companies are now increasing the extent of mechanization in construction, to manage shortage and offset rising labour costs. The new methodologies being adopted by the industry include advanced engineering, innovative materials and efficient construction management to meet the rising infrastructure demands. Director of a leading Mumbai based real estate company says, “Innovative technology can be used to produce the same output with fewer inputs including less labour. Wherever possible with the help of the structural consultants, mechanized processes and materials have been introduced that not only provide increased productivity but have also reduced labour cost by 40% or more".

Indeed, technology is the need of the hour and more developers are going for mechanized materials such as hollow block units, concrete block units, ready mix concrete and self-compacting concrete, as also mechanized construction equipment for core activities and in the areas of mass applicability, such as concrete batching units, hydraulic crawler cranes, self-erecting hydraulic powered equipment, steel rebar interims and pile driving equipment among others. “The construction market is gradually getting matured which has led to the increased demand for construction equipment in India. Presently, more than 50% of the construction equipment in the country is with the rental segment as renting helps save capital cost for the owners of the projects” stated, Sanjoy Chakrabarty, Managing Director, Soilmec India, provider of foundation and  drilling equipment.

constructionhe lack and high cost of workforce has also led to the growth of pre-engineered buildings (PEBs), already being used for commercial and industrial buildings and now finding application in housing projects too. As site assembly of factory manufactured building parts avoids the workforce constraint, its usage is set to grow with time. Furthermore, use of PEB results in reduction of construction time and improves cost benefit analysis of the project due to faster availability and return on real estate investment, say industry experts. According to Civil Engineer Sandeep Suri, Star Buildcon Pvt Ltd, “Indian developers are not utilizing the technology as compared to the developers in developed nations. However, labour cost being a major factor impacting the economic feasibility of a project, it is convincing clients to adopt professional approach to rationalize building design and to modify the methodologies of construction.”

The improvement of labour productivity is a major and continual concern for developers and construction companies. Thus, the use of advanced equipment and innovative technology can address the high labour costs afflicting the industry. However, with increased usage of high-end construction equipment, the demand for trained machine operators is also bound to rise. Consequently, mechanization of construction needs to be supported by proportionate investment in the training of middle level technicians and skilled operators.

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