Construction to resume, focus now on labour, raw materials and funds

Not just the city planning authority, but most road and real estate companies are also now busy seeking local go-aheads.
Lockdown woes may soon end for construction industry, as the latest directive allows work at sites to resume from April 20. In addition to labour, companies are preparing for concerns related to raw materials, local permissions and other norms to be followed.

“This is a permission from the centre, we will wait for a go ahead from the state,” said  R A Rajeev, commissioner for Mumbai Metropolitan Region Development Authority (MMRDA), which is implementing Mumbai’s city-wide metro network project.

Not just the city planning authority, most road and real estate companies are now busy seeking local go aheads.

Raheja Developers, for instance, is co-ordinating with the concerned district magistrates for the final green signal to resume operation. The same holds true for road contractors who are seeking further standard operating procedure (SOP) details from the National Highways Authority of India (NHAI). P C Grover, director general for National Highways Builders Federation (NHFB), said he expected more NHAI chief general managers (CGM) will be accessible for further details after April 20.

Some others point out the relaxation may not apply to all projects. “The permissions, we understand, are for open-air construction projects. Projects will tunneling or under ground work may suffer,” said an industry source, who did not wish to be identified.

Not everyone is sure if all real estate projects stand to gain. “The fact that Covid-19 hotspots will not be able to resume activity from April 20 is a dampener for markets such as Mumbai Metropolitan Region (MMR) — a highly-impacted zone,” said Anuj Puri, chairman for ANAROCK Property Consultants.

Most, surprisingly, do not expect labour to be a major concern. For example, the MMRDA commissioner does not expect a labour shortage as the project’s workforce has been taken care of since the start of the lockdown. Real estate developers like Hiranandani Group and Raheja Developers also pointed out that given labour continued to stay at site, they do not expect any major labour-related issues.


Even before Wednesday’s directive, certain road and infrastructure projects had already resumed work.

“Social distancing is not a concern for road projects as it involves more machinery and less labour,” said the industry source quoted earlier in the story.  A few have also moved supervisory staff close to project sites through temporary accommodation to ensure construction work can continue.

Some also raised concerns over raw material supply. Niranjan Hiranandani, managing director, Hiranandani group, expects raw materials supply to be a concern initially, but to ease out once production resumes.

Nayan Raheja, executive director, Raheja Developers, said it has enough inventory of raw materials to sustain up to two weeks of operations. However, it is also working on to procure more key raw materials like steel and cement.

However, since these sectors were continuing production enough stock is available in the market.

A road developer said the company was working on putting protocols in place on how long raw material is to be left untouched before it can be used safely.

Few other road contractors, who were already hit due to lower road traffic, remain concerned over availability of finance. “There are a whole lot of challenges including labour, raw materials with transportation limit, compensation details are needed for mobilising funds, as toll income is absent,” Grover said.

Stock prices for the three major cement producers in the country gained on Tuesday, on the expectation of a demand revival as construction resumes.

Cement analysts, however, do not expect Tuesday’s relaxation to help revive cement demand. More than half of cement demand in India comes from rural housing, which is expected to remain absent for the entire period of the lockdown.

UltraTech closed at Rs 3,598.15 per share, up 3.88 per cent from its previous day close. ACC closed at Rs 1,138.30 per share, 6.59 per cent higher from its previous close, Ambuja Cement also saw a marginal gain of 2.21 per cent closing at Rs 168.55 per share. BS Reporter


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