PNC Infratech Ltd. is one of the leading integrated infrastructure solution providers in the country actively engaged in investment, construction, development, operation and management of infrastructure projects. Over the years, the company has gained expertise in execution and delivery of projects successfully across sectors that include highways, bridges, flyovers, airport runways, power transmission lines and development of industrial areas. So far it has executed over 44 major infrastructure projects and is currently working on 23 projects on EPC basis. The company’s current order book in terms of outstanding contracts pending execution is valued at over ` 4,000 crore.  PNC Infratech, through its various subsidiaries and associate or joint venture companies, also have a portfolio of eight BOT and OMT projects, of which six projects are already in operation.
Multi-pronged procurement strategyTalking on the company’s procurement policy Chakresh Kumar Jain, Managing Director, PNC Infratech says, “We have prudent procurement policy in place that includes multi-pronged strategy for sourcing, in-house processing of raw materials for key construction activities, selection of products based on life-cycle cost analysis rather than upfront costs, putting robust contractual frameworks with advantageous commercial terms in place, inventory control and close monitoring of quality and performance of materials and equipment procured for future references.” He also adds, “Development of a self-motivated and matured procurement team to efficiently implement the policy framework is also an important focus area of the company. We also believe in continuous knowledge updating of the core procurement team.”
Tips to buy construction equipmentAs PNC Infratech caters to a variety of large-scale projects, it requires a line of state-of-the-art construction equipment in its kitty. Commenting on the points to be considered while making decision of buying construction equipment, Chakresh Kumar Jain says, “The key points we consider while procuring construction equipment include capital and operating costs, output or productivity, performance reliability and accuracy, ease and timely availability spare parts, service commitment of the supplier and finally cost of ownership. Quantum of works to be executed and timelines available to complete the same is another key factor in the decision making process with regard to number of equipment to be procured and capacity thereof.”
He also states that before going for procurement of any new machinery for the first time, PNC Infratech tries to gather firsthand information about their performance from the existing users.
Rent or buy? PNC Infratech owns a huge fleet of construction equipment and its strategic investment in equipment and fixed assets is a distinct advantage that enables the company to rapidly mobilise construction equipment at project sites for achieving desired progress. Having such a multi-functional asset base is a key competency of PNC Infratech in delivering complex construction projects in a time bound manner. Responding to a query on what are the decisive factors to determine whether to rent or buy capital equipment, Chakresh Kumar Jain says, “The key factors to decide whether to rent or buy capital equipment for a given project include cost of hiring vis-à-vis owning, nature of work, possibility of redeployment, economic life of equipment etc. Considering highly competitive environment and thin margins in construction sector, the right balancing and optimal mixing between owning and hiring of key equipment is one of the key success factors.”
Common procurement mistakes Chakresh Kumar Jain illustrates some of the common mistakes of judgement that a construction firm could make in procurement process: • The most common and fundamental mistake is mismatch between procurement and consumption patterns, leading to either over supply or shortage situations. This happens due to lack of comprehensive procurement planning and strategy that commensurate with construction schedule.. • Mismatch between quantities being procured and storage capacities available.• Lack of advanced planning and delay in initiation of procurement process particularly in case of materials that need longer lead times such as imported items, equipment and specialised items etc. • Undue focus and importance given only to price not the value. • Not taking proper and adequate performance bonds for high value materials and equipment. • Experimenting with new products that have no proven track record leading to high risk situations. • Not properly educating the end users at the field about the new products, materials and equipment before putting them in to use. • Not properly assessing the suitability of materials, particularly construction chemicals for the given climatic conditions and working environment. • Overlooking the shelf life and expiry dates of construction chemicals.
————————Considering highly competitive environment and thin margins in construction sector, the right balancing and optimal mixing between owning and hiring of key equipment is one of the key success factors.
Chakresh Kumar Jain, Managing Director, PNC Infratech Ltd.