Building blocks

The container ship Ever Given, which ran aground while navigating the Suez Canal, is quite symbolic of how COVID-19 has held back growth and run plans aground. The ship, which is 400 m long (equal to the height of The Empire State Building in Manhattan) and 60 m wide with a draught of 14.5 m (JNPT and Mundra have drafts of 15 m and 16 m respectively, while the world's largest container handling modern deep draft ports require a draft of 18-20 m) and a gross registered tonnage of 200,000 tonne, has an all-Indian crew and was carrying 20,000 containers bound from Shanghai to Rotterdam. The 195 km Suez Canal, which was opened in 1869, took 10 years to construct, is 300 m wide at the point where Ever Given has lodged itself. Its predicament is holding back a passage of goods worth $3 billion daily. Widening and deepening the canal is being attempted with dredgers, diggers, tugboats and excavators to unblock the canal, which 

is currently blocking 12 per cent of world trade.

When projects get stuck, costs soar. As many as 442 infrastructure projects, each worth `1.5 billion or more, have been hit by cost overruns of over 

`4.34 trillion, according to a report by the Ministry of Statistics and Programme Implementation, meaning an average escalation of `10 billion per project! While the project pipeline was already at a record 14-year low even before the pandemic, real-estate project launches had also got into slowdown mode. Property sales, however, have provided to be outliers and have witnessed a clear correlation to incentives. Registration of residential properties in Mumbai jumped over fourfold in March to 12,696 units compared to March last year on account of reduction in stamp duty by the Maharashtra Government, according to Knight Frank India. A combination of record low home loan rates, reduced property prices along with discounts and offerings with payment flexibility offered by developers have helped provide a much-needed fillip to the sector. This also shows that a combination of multiple factors helps to create a momentum and announcements in isolation do not necessarily work. Hyderabad and Mumbai Metropolitan Region recorded the highest bump in sales over the same quarter last year, as per Anarock Research.

In infrastructure, Union Minister for Road Transport and Highways Nitin Gadkari has managed to cross the target set for 2020-21 of 11,000 km at 30 km per day. “In 2020-21, the Ministry of Road Transport and Highways has constructed 12,205 km of national highways between April and now. The rate of construction is 34 km per day. I am confident that by the end of March, we will reach 40 km per day,” Gadkari said at an event organised by PHD Chamber. Divestment has also gained traction with companies being prepared for IPOs. The Development Finance Institution is being set up at a rapid pace with a clear goal to serve up funds for infrastructure. 

While COVID-19 will indeed reengineer several business models, customer engagement and trust has strengthened companies that built brands with solid foundations. Our cover story throws open for discussion a topic that will continue to reverberate through the year as CONSTRUCTION WORLD sets out to celebrate its silver jubilee. Many special issues, webinars, treats and offerings are planned right through the year, so let the celebrations begin!

Follow me on twitter @PratapPadode