The industry always responds to difficult periods with an increased focus on innovation, says Gaurav Soni, General Manager, KK Gupta Constructions Pvt Ltd.

With the second wave of Covid-19 impacting the country, how do you look at the current EPC market scenario?
The second wave of Covid-19 has gone out of hands as the Covid infection has crashed our infra systems. The second wave of the pandemic appears to be more contagious than last year (2020).

The second wave of Covid-19 cases may lead to a downward rerating of many projects due to delays and other issues and has impacted site operations. Project developers are facing shortages and logistical issues with getting labour and construction materials to sites. There could be bottlenecks caused by drops in steel and cement production, due to heavy oxygen shortage. We are seeing only localised curfew that still allows some activity. Now the question on how to keep the current economic recovery chugging along, remains.

How are you managing the overall operations in the current challenging conditions?
It’s impossible to predict the long-term implications of today’s situation during this massive remote work. It is cleared now workplace preparedness during Covid-19 requires employers to provide the productivity tools and support employees to be effective when working remotely. The coronavirus pandemic has expanded the boundaries of how far organisations thought flexible workplace policies could stretch.

We are following the concept of neighbourhood preference, so people who must collaborate sit near each other. From internal messenger apps to video conferencing solutions, these are the close contact relations which allow workers also to show their capability at right time. Working from home isn’t an option or because their home environment is not conducive to work. That’s why some organisations are assessing alternative work sites too.

Getting the funding and financing at the right time plays an important role in the successful execution of EPC projects. How do you look at the current funding and financing scenario? What are the challenges faced?
Engineering, construction, road, steel and other materials segments have a vital role to play in the post-pandemic recovery of our communities and economies. In this difficult time, construction matters more than ever. Construction sites in many countries have shut down. Contractors are facing shortages and logistical problems, increasing raw material rates with getting labour and construction material to the site. Financial and technical capacity of the bidders are also affected due to Covid-19 and some bidders are unable to meet the eligibility criteria.

Keeping in view of the present uncertain conditions, it has been decided to relax the financial as well as technical eligibility criteria to encourage increased participation of the bidders. We must appreciate to government, they did a good job in the infra sector. The Ministry of Road Transport and Highways (MoRTH) has already announced a few relaxations under the ‘Aatmanirbhar Bharat’ scheme to MSME contractors. This has been done to overcome delays and relaxations are applicable for the ongoing as well as yet to-start projects.

A few relaxations have also been provided to bidders in ‘performance security’ and additional performance security. Financial and technical capacity of the bidders are also affected due to Covid-19 and some bidders are unable to meet the eligibility criteria. Keeping in view the present uncertain conditions, it has been decided to relax the financial as well as technical eligibility criteria to encourage increased participation of the bidders. From the banking sector, government took a positive decision in March 2020 by giving a moratorium on loan. This was real oxygen for the contractors.

How technology is playing a vital role in successful project execution? What are the current technology trends in EPC projects?
Contracting is challenging since both owner and contractor are faced with limiting their risks. Projects have become more complicated in recent years. Costs can vary according to conditions. EPC contracts playing a role to provide clients with cost, timeline, and construction enables massive improvements in the safety, efficiency and productivity of large-scale construction projects. The past year amidst the pandemic was difficult for the construction industry as it strived to protect its workers and keep job sites open. The industry always responds to difficult periods with an increased focus on innovation, so the coming year is likely to see further development of technologies that are reshaping construction as we know it.

What are the procurement challenges in construction equipment and materials in the current conditions? What are the measures needed to mitigate such challenges?
The construction industry everywhere is facing problems and challenges. We must align it with current needs and priorities to components and equipment. The construction industry is facing three major problems currently, which are the rising cost of raw materials, skilled labour shortage and escalation in prices.

For smooth execution, the government’s first reaction is to ensure that there is continuity of supply and minimum job losses. They must also understand the risk factors with contractors and evaluate this from time to time.

Roads and highways sector has performed well in the last fiscal despite the Covid impact. What is your outlook on the performance in the current fiscal and beyond?
The road network is the backbone of the transport system in India and it is very well integrated with the multimodal system of transportation, which provides crucial links with airports, railway stations and other logistical hubs. During the pandemic and India now gradually making its way towards recovery, growth sustainability in 2021 will depend on widespread vaccine deployment and effective government measures. It has argued that 2021-22 actual for certain states would not be this high and the next year budget will show downward revision in FY22 GDP estimates.

Significantly, many states, though hoping for a recovery in 2021-22, remain cautious about growth forecasts. It is also possible that the pandemic and lockdown impacting urban centres more than the countryside. States with a higher contribution from agriculture are expected to do well.